US hopes to narrow wide gap in China trade talks

US Secretary of Commerce Wilbur Ross at a hearing before the Commerce, Justice, Science, and Related Agencies Subcommittee of Senate Appropriations Committee on Capitol Hill in Washington, DC. (Alex Wong/Getty Images/AFP)

"The gap is wide," Ross said in congressional testimony, a week after he led a delegation to Beijing to try to resolve the thorny dispute.

A high-level Chinese delegation will be coming to Washington next week, and "I'm hopeful we will make further progress with them," he said.

The US has threatened tariffs targeting US$150 billion in Chinese imports, while Beijing has warned that US$50 billion in US goods are in the firing line.

Vice Premier Liu He - considered Xi's right-hand man on economic issues - led talks in Beijing last week and will head the Chinese delegation to Washington next week.

Ross said the US officials presented a detailed list of requests for changes in China's trade policy - "product by product and quantity by quantity." Agricultural goods, which have been targeted for retaliation by Beijing, figured prominently.

China "responded in kind" with a counter proposal, so the sides are now working on "a very specific set of bids and asks," he said.

In response to a question, Ross said President Donald Trump has ordered the Agriculture Department to do all it can to minimize the impact of any tariffs.

"We're all well aware that it's horribly unfair for one industry to bear the brunt of retaliation in our efforts to help other parts of economy," Ross said.

"We'll do our level best to resolve the problem."

The US reportedly has demanded Beijing reduce the bilateral trade deficit by $200 billion a year.

The dispute erupted when Trump imposed steep tariffs in March of 25 per cent on all steel imports and 10 per cent on aluminium, citing national security reasons amid a global glut of the metals.

The sanctions hit friend and rival alike, prompting threats of retaliation from the European Union.

However, Ross indicated the EU could accept a quota system limiting imports of steel and aluminium into the United States in order to win an exemption from the tariffs.

He said he will speak to EU Trade Commissioner Cecilia Malmstroem again early next week and "there is a reasonable chance we'll work something out."

Argentina, Brazil and South Korea all agreed to quotas to cap shipments from their countries in order to be exempt from the metals tariffs.