WASHINGTON: China may buy up to $200 billion worth of American goods under intense pressure from the Trump administration to reduce its massive trade deficit with the US, a media report said on Friday, amid a round of high-level trade talks between the world’s two largest economies.
The US has threatened to impose 25 per cent tariffs on up to $150 billion in Chinese goods while China has targeted $50 billion in American exports.
The two countries have not yet implemented their tariff increases to reach a negotiated settlement.
A high-level Chinese delegation led by Vice Premier Liu He is currently in Washington for trade negotiations with the US. The two-day talks would continue until Friday.
Liu called on US President Donald Trump at the White House yesterday.
“Chinese negotiators are preparing to offer the administration a deal to buy up to $200 billion worth of American goods, which would allow Trump to claim victory in his campaign to reduce the trade deficit with China and rebalance America’s trade relationship with its biggest economic rival, according to people briefed on the deliberations,” The New York Times reported.
The Chinese promises would be largely illusory, economists cautioned, given the structural hurdles in China to buying more American exports and the sheer amount of goods the United States would have to produce to meet Beijing’s demand, the daily reported.
But in Beijing, Chinese Foreign Ministry spokesman Lu Kang said the “rumours are false” and the “consultations are indeed still in progress and the talks are constructive.”
Lu also said the decision to drop the sorghum probe should not be “over-interpreted.”
In a readout of the latest round of trade negotiations, the White House said the US officials conveyed the President’s clear goal for a fair-trading relationship with China.
The US delegation is led by Treasury Secretary Steven Mnuchin. It also includes Commerce Secretary Wilbur Ross and US Trade Representatives Robert Lighthizer.
“The United States officials and the Chinese delegation also participated in a meeting with President Donald J Trump at the White House. The two sides agreed to continue the discussions on Friday,” the White House said.
According to The New York Times, under the deal being discussed, China would pledge to buy substantially more American goods, including agricultural products like soybeans, as well as semi-conductors and natural gas.
“That could theoretically reduce its trade surplus with the United States – which hit $372.5 billion last year – by up to $200 billion, though the real number would most likely be lower,” it said.
In return, China is asking the US to set aside tariffs and investment restrictions it has threatened against Chinese companies, the report said.
Meanwhile, the US Congress is looking set to advance a bill that would give the US greater power to block deals between American and Chinese companies that could risk national security, The Wall Street Journal said.
The US, the world’s largest economy, has a trade deficit of almost $500 billion with the world’s second largest economy China.