China and the United States are in constant touch to resolve pending trade and economic issues, the Ministry of Commerce said on Thursday.
The comment came ahead of Sunday's US deadline for another scheduled round of tariff increases on Chinese imports worth almost $160 billion. If a trade deal is not struck by Sunday, computer monitors and toys will be among the Chinese export items likely to be affected.
Gao Feng, a ministry spokesman, said the Customs Tariff Commission of the State Council has already worked out tariff exemptions on some soybean, pork and other products shipped from the US — the latest sign of tensions easing in the protracted trade conflict.
The US seems to resort to brinkmanship by using a tariff deadline to pressure China in the ongoing trade talks for a phase one, preliminary deal, said Chen Wenling, chief economist at the China Center for International Economic Exchanges.
In addition to burdening consumers, financial markets and trade and investment activities across the world, she said a maneuver involving additional tariffs would not work because China has not agreed to a deal without the removal of existing tariffs.
To safeguard its interests, China announced in late August that it would impose on Sunday additional tariffs of 10 percent or 5 percent on more than 3,300 types of US exports such as agricultural products, chemicals and auto parts if the US increases tariffs that day.
Gao, of the Commerce Ministry, reiterated that China will continue to firmly uphold the rules-based multilateral trading system and support the efforts of all parties to restore the operation of the World Trade Organization's appellate body. The WTO suspended its settlement of new trade disputes as of Tuesday because the US has blocked appointment of new judges.
In the meantime, China is studying an interim plan for handling WTO dispute cases during the appellate body's standstill, he said. Gao said the country will put forward its proposals in due time and work with other members to restore the effective operation of the dispute settlement mechanism as soon as possible.
Liang Zhonghua, a researcher at Zhongtai Securities, said the collapse of the WTO dispute settlement mechanism will be a "severe blow" to global free trade.
"At present, the world wealth gap has reached a peak again, and major economies have severe internal issues," Liang said.
Zhang Monan, lead researcher at the Department of American and European Studies at the China Center for International Economic Exchanges, said Washington does not want to completely abandon the WTO or overthrow it because that, in turn, would harm the US economy in a big way. What the US administration is doing is exerting maximum pressure on the WTO to ensure its reforms proceed in a way that fulfills US interests.
"If other WTO member economies don't stand up to safeguard the rules-based multilateral trading system, the global trade body could be marginalized, and even disintegrate," she said.