US and China send different messages on Asia priorities

SUZHOU, China — Just over a week after the U.S. and Chinese presidents met in Beijing, the world's two largest economies are sending different messages about their priorities for Asia.

First is tariffs.

China's economy relies significantly on exports — and the free-flow trade — as it accounts for about 28% of the goods made globally, according to CNBC calculations of World Bank data.

Beijing's statements on Chinese President Xi Jinping and U.S. President Donald Trump's summit last week have noted how duties will remain lower for longer, while the U.S. did not mention tariffs.

Then on Saturday, China's Commerce Minister Wang Wentao told reporters that affirming the "vision" of a free trade agreement was a key outcome of the just-concluded Asia-Pacific Economic Cooperation trade ministers meeting.

"In the context of rising uncertain and destabilizing factors in global and regional economic development, members redirected their attention to the FTAAP (Free Trade Area of the Asia Pacific) with commitment to continuing advancing economic integration through the FTAAP agenda," Wang said in Chinese, according to an official English translation.

However, when CNBC a day earlier asked a member of the U.S. delegation about FTAAP and free trade, the response focused on balanced trade, part of the Trump administration's rationale for tariffs.

"FTAAP, is really, it's more an agenda than it is a kind of destination," said Casey K. Mace, the U.S. Senior Official to the APEC Forum. He noted the U.S. has been "active" in elements of FTAAP such as competitiveness, labor standards and trade facilitation.

China is the host for this year's APEC meetings, set to culminate in November with a high-level gathering in Shenzhen. Trump and Xi are also expected to meet alongside that event.

Second is what's next for the U.S. and China.

There's little detail yet on how the two sides will move forward with implementing "constructive strategic stability," beyond China's purchase of 200 Boeing airplanes and $17 billion annually in U.S. agricultural products through 2028.

A Chinese readout released early Saturday said Wang met Thursday in Suzhou with Rick Switzer, the U.S. Deputy Trade Representative and head of the U.S. delegation for the APEC trade ministers meeting.

The readout said both sides hoped to reach an agreement as soon as possible on the details of economic outcomes from the Trump-Xi meeting — an indication that differences still remain.

The U.S. embassy in Beijing and the U.S. State Department did not immediately respond to a request for comment.

Third is a broadening of the U.S. and Chinese tech race into Asia.

The APEC trade ministers' meeting reached a "new consensus" on digital trade cooperation, Wang said.

When asked to elaborate, Lin Feng, director-general of the Chinese Commerce Ministry's department of international trade and economic relations, noted plans to make it easier for e-commerce companies to do business in the region, and a "commitment to strengthening trade exchanges related to AI."

Lin noted efforts to "narrow the digital divide" but did not mention Chinese AI companies in particular.

While the U.S. has restricted the ability of Chinese companies to access advanced semiconductors for training AI models, Chinese businesses have tended to release AI models that are cheap – if not free – to use, and with capabilities that increasingly narrow the gap with their U.S. rivals.

On the U.S. side, Mace emphasized plans "to continue to position the U.S. tech companies, digital companies, as the leaders in the region."

Mace said U.S. tech firms would be giving workshops at an APEC "digital week" in Chengdu in July. While China is the host of the event, "it's an opportunity to engage with all 21 [APEC] economies," he added.

The U.S. is one of the 12 founding members of APEC, which was launched in 1989 in Australia as an informal forum for discussions on free trade and economic cooperation. The multilateral trade organization now has 21 members, including mainland China, Hong Kong and "Chinese Taipei," which joined the forum in 1991.

Wang did not comment on the "urgent official business" that had prevented him from chairing the opening session on Friday.