US officials downplay hopes of end to restrictions on China trade

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Top Biden administration officials dimmed hopes of an immediate easing of tariffs against China on Sunday even as they signalled scope for a more constructive relationship with Beijing.

Speaking ahead of a meeting of Group of 20 finance ministers and central bankers in India, US Treasury secretary Janet Yellen said she was eager to work more closely with China on areas of “mutual concern” following a four-day trip earlier this month that she said put the relationship on “surer footing”.

However, at a press conference that followed her remarks, she stressed that while it would be useful to identify ways to de-escalate tensions over time, it is “premature” to relax trade restrictions.

“The tariffs were put in place because we had concern with unfair trade practices on China’s side and our concerns with those practices remain. They really have not been addressed and China put in place retaliatory tariffs of its own,” she told reporters.

“Perhaps over time this is an area where we could make progress, but I would say it’s premature to use this as an area for de-escalation, at least at this time.”

The US is completing a four-year review of the trade tariffs.

Jake Sullivan, the White House national security adviser, on Sunday expressed frustration with what he described as a “self-defeating move” by China to impose export controls on critical ingredients to manufacture computer chips beginning on August 1.

“We’re not looking to end all trade with China, what we’re looking to do is have a small yard of restrictions on technology with national security implications, and a high fence around that yard,” he told CBS News.

“That’s what we’re going to continue to do, And China, of course, will have to make its own decisions.”

The Biden administration is considering ways to prevent US investment from helping China’s military. During her trip to Beijing, Yellen said those controls would be “highly targeted and clearly directed narrowly at a few sectors where we have specific national security concerns”.

Sullivan said on Sunday that he expected President Joe Biden and Xi Jinping of China to speak again “at some point”.

“It is a big, complex, challenging relationship that has to be managed carefully and that can only really be done effectively from the very top.”

Washington has increased its diplomatic outreach to Beijing in recent weeks, with John Kerry, the presidential envoy on climate, becoming the third cabinet member to go to China.

Kerry, who arrived on Sunday, is set to meet his Chinese counterpart, Xie Zhenhua and other officials over three days of meetings.