US Treasury Secretary Steven Mnuchin. Photo: Reuters/Jason Lee
US Treasury Secretary Steven Mnuchin. Photo: Reuters/Jason Lee

Officials in the Trump administration and counterparts in Beijing have finally reopened a line of communication for talks on an escalating trade conflict, according to a report on Tuesday, though plans for formal negotiations have not been finalized.

US Treasury Secretary Steven Mnuchin has already begun speaking with Chinese Vice-Premier Liu He, Bloomberg reported, adding that high-level talks are taking place this week. At various points in recent rounds of trade negotiations, Mnuchin and He were tapped as point men for the two sides.

US stocks and offshore yuan both gained following the news.

The sign that Washington and Beijing are edging closer to reengaging in dialogue comes after more than a month of stalled talks, with little indication that progress was being made. Chinese President Xi Jinping, along with He, is said to have been caught off guard after the White House abruptly backed out of a tentative deal in late May.

Both sides had previously declared a truce to avoid the imposition of tariffs, while negotiations on China’s proposal to increase purchases of American energy and agricultural products was ongoing. Then on the eve of US Commerce Secretary Wilbur Ross’ arrival in Beijing for the third round of talks, the White House announced that tariffs will be imposed, even while talks continued.

The decision to send the hawkish Ross in place of Mnuchin was seen as a sign that the White House had decided to take a harder line in talks with Beijing. The Trump administration’s approach to trade talks with China has been characterized at points by disagreement among officials, which is said to have confounded their counterparts in Beijing.

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