Trade war on hold as China agrees to import more from the US, cut surplus
WASHINGTON: 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 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.”
A Chinese delegation led by Vice Premier Liu He, who is a close adviser to President Xi Jinping, held a series of talks with American trade officials in the US this week.
The negotiations progressed smoothly after a White House presentation by the visitors on Thursday, US negotiators said.
“There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China,” the joint statement said on Sunday, addressing a key issue for Trump, which he had railed against as a candidate for the White House and which he cited to initiate a series of trade actions against China after taking office.
The statement reflected attempts to address other issues the United States has raised with China — intellectual property rights and uneven playing field for American companies operating in China.
“Both sides attach paramount importance to intellectual property protections, and agreed to strengthen cooperation,” it noted, adding: “China will advance relevant amendments to its laws and regulations in this area, including the Patent Law.”
There was an agreement to “create a fair, level playing field for competition”. Americans have complained, for instance, their companies are forced to transfer technological know-how to their local partners as a precondition for doing business.
Global Times, a Chinese stateowned media outlet, called the joint statement a “win-win” for both parties.
“The US will have the opportunity to reduce its trade deficit with China, while China will achieve the consistent purchase of US goods to benefit the development of the country and its people’s life.”
It added: “The US has promised to break its control of energy exports to China, which will diversify China’s energy import channels. The US will sell more agricultural products to China, which is the equivalent to ‘exporting’ agricultural nature and technologies to China.”