Trump and China headed for a double-barrelled war

US-China to hold talks to reduce trade tensions

At his meeting with his U.S. counterpart Mike Pompeo in Beijing yesterday, he warned Washington against falling into a wrong path of "conflict and confrontation".

Mr Pompeo, for his part, reiterated concerns raised by Mr Pence last week over China's actions in areas such as the South China Sea, Taiwan and human rights.

"We require that the USA stop such misguided actions", he said, adding that the two countries should pursue cooperation "and not descend into conflict and confrontation".

"We believe this has been a direct attack on our mutual trust, and has cast a shadow on China-U.S. relations", he continued.

Trump has frequently criticised China for his belief that Beijing is artificially weakening its currency to make Chinese exports more competitive, something he believes Beijing is doing to hurt the USA economy.

I know it's considered bad manners to bring data into an economic debate, but after seeing numerous stories telling us how bad China's economy has been hit by Trump's tariffs (e.g. this NYT piece), I thought it was worth looking at the numbers.

Mr Pompeo, in his remarks, said the two sides have a "fundamental disagreement" on the issues characterised by Mr Wang.

A key reason for Mr Pompeo's visit to the region and China - the last stop of a trip that included the two Koreas and Japan - is to push forward the North Korea denuclearisation process.

"I would certainly expect so", the official said.

To this, Mr Wang rejoined: "Actually I would like to add that the strategic dialogue was not called off by the Chinese". China has backed United Nations sanctions on its Cold War-era ally, though it recently called for them to be eased.

Wang said the North Korean issue shows that Beijing and Washington "can and should increase communication and cooperation".

Pompeo, who arrived from North Korea, told Yi he wanted to fill him on his meetings with its leader, Kim Jong Un, and efforts to achieve the denuclearization of the Korean Peninsula.

Pompeo did not have a scheduled meeting with Chinese President Xi Jinping, a fact that a senior U.S. State Department official on the trip said was not odd, even though top U.S. officials often meet Chinese heads of state on visits.

Separately, US Treasury secretary Steven Mnuchin said that his department continues to monitor China's actions with regards to its currency, the renminbi. But Cui said the USA needed to clarify what it wanted.

Pompeo replied that it was "important that we listen to each other, work through and find constructive solutions so we can find a good outcome for both our countries".

After spending about five hours in Beijing, Pompeo headed for the airport to return to Washington.

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