Trade war on hold as China agrees to import more from the US, cut surplus

China will buy “significantly” more goods and services from the United States, with the two countries announcing their resolve to defuse economic and trade differences in a “proactive manner”, addressing on Sunday the fears of a tariff war.

A joint statement issued by the countries after a meeting of their trade officials did not mention a specific figure for how much more China will buy to reduce its $375 billion in trade surplus over the US. Larry Kudlow, the US president’s chief economic adviser, had suggested earlier it would be “at least $200 billion”.

The Chinese will ramp up their purchases in US agriculture and energy sectors, the statement said, adding that a US team will visit China to work out the details. For now, the two sides “agreed to continue to engage at high levels on these issues and to seek to resolve their economic and trade concerns in a proactive manner”, the statement read.

It averted the danger of a trade war fuelled by rising rhetoric and tariff hike threats.

The Trump administration had initiated talks with China, with treasury secretary Steve Mnuchin leading a high-level team to Beijing earlier in May. The visit came after a series of threats of tariff hikes over the last few weeks.

The US had threatened to levy $150 billion in additional tariff over Chinese goods, and Beijing had hit back with measures that not only raised tariff but targeted goods and sectors designed to hurt Trump’s political base.

“We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said in a television interview on “Fox News Sunday.”