China and US say trade talks on track despite coronavirus tensions

By James Politi in Washington and Ryan McMorrow in Beijing

Top US officials said their trade pact with China remained on track despite rising tensions, easing fears that the coronavirus pandemic had upended the two country’s fragile economic truce.

Washington’s reassuring remarks come after Donald Trump has continually lashed out at Beijing’s handling of the virus. The US president has also threatened to “terminate” the trade deal because of scepticism over China’s willingness to honour its pledge to buy billions of dollars of American goods.

Robert Lighthizer, the US trade representative, and Steven Mnuchin, the Treasury secretary, held a conference call with Liu He, China’s vice-premier, on Thursday night to discuss the implementation of the “phase one” agreement.

“Both sides agreed that good progress is being made on creating the governmental infrastructures necessary to make the agreement a success. They also agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner,” USTR and Treasury said in a joint statement.

Mr Trump had raised concerns about the viability of the trade deal. He has accused China of failing to prevent a pandemic that has left the US and global economies reeling and caused more than 75,000 deaths in America.

“Now they [China] have to buy,” Mr Trump had told Fox News. “And if they don’t buy, we’ll terminate the deal, very simple.”

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Apart from threatening to abandon the trade pact, which marked a truce after nearly two years of tariff escalations between Washington and Beijing, US officials and lawmakers have also considered other economic measures. These have ranged from export controls to investment curbs and crackdowns on integrated supply chains.

But the drive to punish Beijing was tempered by concern over the damaging impact of a new breakdown in the trade relationship at a time when the global economy has been hammered by the pandemic.

China’s ministry of commerce said the two sides agreed to strengthen co-operation over macroeconomic and public health matters.

The ministry added that the world’s biggest economies would “strive to create a favourable atmosphere and conditions for the implementation of the first phase of the China-US economic and trade agreement, and push forward to achieve positive results”.