US press­ing China to cut trade sur­plus by $100 bln: White House

Enterprise - - International news -

The Trump ad­min­is­tra­tion is press­ing China to cut its trade sur­plus with the United States by $100 bil­lion, a White House spokes­woman said, clar­i­fy­ing a tweet from Pres­i­dent Don­ald Trump.

Last month, Trump tweeted that China had been asked to develop a plan to re­duce its trade im­bal­ance with the United States by $1 bil­lion, but the spokes­woman said Trump had meant to say $100 bil­lion. The United States had a record $375 bil­lion trade deficit with China in 2017, which made up two thirds of a global $566 bil­lion US trade gap last year, ac­cord­ing to U. S. Cen­sus Bureau data.

China re­ported its 2017 US trade sur­plus as $276 bil­lion, also about two thirds of its re­ported global sur­plus of $422.5 bil­lion. The White House spokes­woman de­clined to pro­vide de­tails about how the ad­min­is­tra­tion would like China to ac­com­plish the sur­plus-cut­ting goal -- whether in­creased pur­chases of US prod­ucts such as soy­beans or air­craft would suf­fice, or whether it wants China to make ma­jor changes to its in­dus­trial poli­cies, cut sub­si­dies to sta­te­owned en­ter­prises or fur­ther re­duce steel and alu­minium ca­pac­ity.

The re­quest comes as the Trump ad­min­is­tra­tion is said to be pre­par­ing tar­iffs on im­ports of up to $60 bil­lion worth of Chi­nese in­for­ma­tion tech­nol­ogy, tele­coms and con­sumer prod­ucts as part of a US in­ves­ti­ga­tion into China´s in­tel­lec­tual prop­erty prac­tices. It is also un­clear if the re­quested $100 bil­lion re­duc­tion would ad­dress US com­plaints about China´s in­vest­ment poli­cies that ef­fec­tively re­quire US firms to trans­fer tech­nol­ogy to Chi­nese joint ven­ture part­ners in or­der to gain mar­ket ac­cess.

The is­sue is a core part of the probe be­ing con­ducted un­der Sec­tion 301 of the Trade Act of 1974, a pro­vi­sion sel­dom in­voked since the World Trade Or­ga­ni­za­tion was founded in 1995. Trade ex­perts have said tar­iffs im­posed as a re­sult of the China in­tel­lec­tual prop­erty probe may fall out­side of WTO rules. In an ed­i­to­rial, widely-read Chi­nese state-run tabloid the Global Times said the United States was try­ing to play the vic­tim.

“If the US wants to re­duce its trade deficit, it has to

make Amer­i­cans more hard-work­ing and con­duct re­forms in ac­cor­dance with in­ter­na­tional mar­ket de­mand, in­stead of ask­ing the rest of the world to change,” it wrote.

“Once a trade war starts, ca­pa­ble coun­tries won´t bow to the US China has tried hard to avoid a trade war, but if one breaks out, ap­pease­ment is not an op­tion.”

Wash­ing­ton showed that it has not aban­doned the global trade body, launch­ing a WTO le­gal chal­lenge to In­dia´s ex­port sub­si­dies for do­mes­tic com­pa­nies, in­clud­ing pro­duc­ers of steel, chem­i­cals, phar­ma­ceu­ti­cals, tex­tiles and IT prod­ucts. U. S. Trade Rep­re­sen­ta­tive Robert Lighthizer said In­dia had failed to re­move the sub­si­dies as re­quired by WTO rules af­ter the coun­try reached cer­tain eco­nomic bench­marks.

The United States is ex­pected to in­voke a na­tional se­cu­rity ex­cep­tion to WTO rules in im­pos­ing im­port tar­iffs of 25 per­cent on steel and 10 per­cent on alu­minium an­nounced by Trump. U. S. Com­merce Sec­re­tary Wil­bur Ross told law­mak­ers his depart­ment would soon pub­lish pro­ce­dures for prod­uct-spe­cific ex­emp­tions from the steel tar­iffs for items that are not avail­able from do­mes­tic pro­duc­ers or in short sup­ply.

Anne For­ristall Luke, pres­i­dent of the U. S. Tire Man­u­fac­tur­ers As­so­ci­a­tion, said the group would be “press­ing very hard” for an ex­emp­tion from tar­iffs for high­strength wire rod used to make cord for steel tire belts that is not pro­duced by U. S. mills. The largest sources for the ma­te­rial are Ja­pan and Brazil, she said, adding that U. S. tyre pro­duc­ers will lose busi­ness to for­eign com­peti­tors if their steel costs rise. “We are work­ing this from the prod­uct side and the coun­try side. We think we have a very good case,” she told Reuters.

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