Beijing agrees to import more American goods as tensions ease
● Nations’ accord to reduce US deficit ● Numerical goal not on talks agenda
The United States and China have agreed to take measures to “substantially reduce” America’s massive trade deficit with China, but the Trump administration has failed to get Beijing to commit to a specific numerical goal.
The talks ended on Saturday and led to a joint statement being issued that may have helped to ease tensions between the world’s two biggest economic powers.
The two nations have in recent months threatened to impose punitive tariffs on billions of dollars of each other’s exports.
But Beijing has committed to “significantly increase” its purchases of American goods and services, saying the rise would “meet the growing consumption needs of the Chinese people and the need for high-ever quality economic development”.
The two countries also agreed on “meaningful increases” of US agriculture and energy exports and greater efforts to increase trade in manufactured goods and services.
The US said it would send a team to China to work out the details. However, the statement provided no dollar amounts on how much China might boost its purchases of American products.
But Lawrence Kudlow, head of the president’s National Economic Council, said a reduction in the trade gap of at least $US200 billion (£148bn) by 2020 was a “good number”.
Last year, the US had a record deficit with China in merchandise trade of $Us375bn (£278bn) – the largest with any nation.
The statement also offered no clarity over whether the talks had made progress in easing a developing tit-fortat trade war in which each nation threatened to impose punitive tariffs.
Trade analysts said it was highly unlikely China would agree to a numerical target for cutting the trade gap between the two nations, but said the discussions likely were more successful in deescalating recent trade tensions.
Eswar Prasad, an economist and trade expert at Cornell University, said: “It is likely that this agreement, weak and vague though it is, will serve as grounds to at least delay the imposition of tariffs.”
Referring to the meeting to be held on 12 June between US President Donald Trump and North Korea’s leader Kim Jong-un, Mr Prasad said: “The Trump administration seems eager to engineer at minimum a temporary peace with China to ensure a smooth run-up to the Kim-trump summit.”
The Washington talks, which followed a high-level meeting last month in Beijing, were led on the Chinese side by vice premier Liu He and on the American side by treasury secretary Steven Mnuchin. The US delegation included US trade representative Robert Lighthizer.
Mr Trump campaigned in 2016 on a pledge to get tough on China and other US trading partners. He has spoken of viewing the US trade deficit with China as evidence Beijing was engaged in abusive trading practices.
Mr Lighthizer started an investigation in August into Beijing’s strong-arm tactics to challenge US technological dominance. These include cyber theft of US companies’ trade secrets and China’s demands that American corporations hand over technology in exchange for access to the Chinese markets.
Last month, the administration proposed tariffs on $Us50bn (£37bn) of Chinese imports to protest the forced technology transfers. Mr Trump later ordered Mr Lighthizer to seek up to an additional $Us100bn (£74bn) in Chinese products to tax.
China responded by targeting $Us50bn (£37bn) in US products, including soybeans – a shot aimed squarely at Mr Trump supporters in America’s heartland. The prospect of an escalating trade war has shaken financial markets and alarmed business leaders.