U.S., China agree to resume trade talks, markets jump

China and the United States on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping for a trade war thaw as new U.S. tariffs on Chinese consumer goods chip away at global growth, Trend reports citing Reuters.

The new talks were arranged during a phone call between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, China’s commerce ministry said in a statement.

They would be the first in-person, high-level discussions since a failed U.S.-China trade meeting at the end of July prompted U.S. President Donald Trump to proceed with fresh tariffs on virtually all remaining Chinese imports so far untouched by the trade war.

But there was no indication that the first round of these tariffs - a 15% duty on Chinese consumer goods imposed on Sept. 1 - would be rescinded or halt a planned Oct. 1 tariff increase on $250 billion worth of goods already levied at 25%.

The U.S. Trade Representative’s office did not specify timing for the ministerial-level talks, saying only that these would take place "in the coming weeks.”

"In advance of these discussions, deputy-level meetings will take place in mid-September to lay the groundwork for meaningful progress,” USTR spokesman Jeff Emerson said in a statement.

Hu Xijin, editor of China’s state-run Global Times newspaper, struck an upbeat tone on Twitter, saying, "Personally I think the US, worn out by the trade war, may no longer hope for crushing China’s will. There’s more possibility of a breakthrough between the two sides.”

But William Reinsch, a former senior U.S. Commerce Department official, said the trade talks could drag well into 2020 since the two sides are still far apart on key issues, such as Washington’s demand that Beijing codify its reforms into law.

"The president has to choose between accepting a weak agreement or continuing the war,” said Reinsch, now at the Center for Strategic and International Studies.

"The trick is to make an agreement in September or October 2020, shortly before the presidential election, and it’ll look like he’s a hero,” Reinsch said. "If he does that too soon, it has time to fall apart before the election. The Chinese aren’t going to comply with it anyway,” Reinsch added.