The US Trade Representative Robert Lighthizer (left) and Treasury Secretary Steven Mnuchin (center) will continue discussions with Chinese Vice-Premier Liu He (right). Photo: AP

JAKARTA (TheInsiderStories) – China and the United States (US) agreed to hold the senior level trade talks in early October, said commerce ministry on Thursday (09/5). The news immediately made US’ markets soared with Dow Jones industrial average climbed 372 points, the Standard & Poor’s 500 Index up more than 1 percent, while the Nasdaq composite rose nearly 2 percent.

The deal has been reached after Chinese Vice Premier Liu He, Chinese Commerce Minister Zhong Shan, People’s Bank of China Governor Yi Gang with their counterpart US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have a phone call on Thursday (09/05).

New tariffs on US and Chinese imports have rattled investors’ nerves in recent months. US’ President Donald Trump has imposed 15 percent tariffs on about US$112 billion worth of Chinese goods this past Sunday. Then, China has countered with tariffs as high as 10 percent on American goods.

The two sides agreed to jointly take concrete actions to create favorable conditions for subsequent consultations, China’s ministry of commerce spokesman Gao Feng told a press conference as cited from Xinhua.

Working groups of the two sides will conduct consultations in earnest in mid-September to make full preparations for the high-level talks to achieve substantial progress, he said. China firmly opposes escalating the trade war, which harms China, the US, and the whole world, Gao said.

A spokesman for the US Trade Representative’s office confirmed that Lighthizer and Mnuchin spoke with Liu and said they agreed to hold ministerial-level trade talks in Washington in the coming weeks, AP reported.

News of the early October talks lifted most Asian share markets yesterday, raising hopes these can de-escalate the US-China trade war before it inflicts further damage on the global economy. China’s main stock market index was up 1.6 percent at midday following the announcement. Tokyo’s Nikkei 225 gained 2.3 percent and South Korea’s main index rose 1 percent.

On Sunday, Washington began imposing 15 percent tariffs on an array of Chinese imports, while China began placing duties on US crude oil. The US plans to increase the tariff rate to 30 percent from the 25 percent duty already in place on US$250 billion worth of Chinese imports from October 1.

Chinese leaders will have a packed schedule next month, gearing up for National Day celebrations scheduled for October 1. They will also hold a key meeting in October to discuss improving governance and “perfecting” the country’s socialist system, state media has said, more than a year after the last was held.

US President Donald Trump warned on Tuesday he would be tougher on Beijing in a second term if trade talks dragged on, compounding market fears that ongoing trade disputes between the US and China could trigger a US recession.

A separate report showed the US services industry rebounded last month to its fastest expansion since February, bouncing back from a three-year low, according to the Institute for Supply Management’s non-manufacturing purchasing managers index (PMI).

Beside US’ market, European and emerging markets stocks also jumped on hopes that next month’ US-China trade talks would move the world’s two largest economies closer toward ending their cantankerous dispute, which has pushed major economies toward recession.

The tide of trade optimism also lifted oil prices, but the gain was capped by a report showing an unexpected increase in US crude inventories. US crude, known as West Texas Intermediate, gained 1.88 percent to $57.32 per barrel and Europe’ oil benchmark Brent was last at $61.94, up 2.04 percent on the day.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com