[Asia Economy Reporter Jeong Hyunjin] U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He held a video call on the 5th (China time) to discuss economic issues including U.S. tariffs on China.
According to Bloomberg and other sources, the U.S. Treasury Department released a statement saying, "Secretary Yellen and Vice Premier Liu had an honest and substantive dialogue regarding the macroeconomic and financial developments between the U.S. and China, rising commodity prices, and food security issues." It added, "Secretary Yellen candidly raised concerns about the impact of Russia's invasion of Ukraine on the global economy and China's unfair and non-market economic practices."
The Chinese Ministry of Commerce also stated that during the video call, Vice Premier Liu told Secretary Yellen that the removal of tariffs and sanctions and fair treatment of Chinese companies are areas of great concern for China. Both sides discussed economic policies and the stabilization of global supply chains and agreed on the importance of strengthening communication and cooperation between the U.S. and China for the benefit of both countries and the world. The Ministry emphasized that practical and constructive communication took place.
This video call between the U.S. and Chinese ministers came amid the U.S. considering reducing tariffs on China. The Wall Street Journal (WSJ) reported the previous day, citing multiple sources, that U.S. President Joe Biden may announce this week a reduction in high tariffs on Chinese consumer goods such as clothing and stationery.
WSJ noted that President Biden has not yet made a final decision and the announcement timing could be delayed, but it is expected that a broad framework will be introduced to suspend tariffs on consumer goods and allow importers to request tariff exemptions. When President Biden expressed his willingness to speak with Chinese President Xi Jinping about tariff reductions on the 21st of last month, the market interpreted this as a sign that the timing of tariff cuts was imminent.
Within the Biden administration, Secretary Yellen has shown a positive attitude toward reducing tariffs on China to curb inflation, but U.S. Trade Representative Katherine Tai and White House National Security Council Advisor Jake Sullivan reportedly believe tariffs should be used as leverage to obtain other concessions from China, WSJ reported.
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