China Rejects U.S. Target for Narrowing Trade Gap

May 21, 2018

A last-ditch effort by the Trump administration failed to get China to accept its demand for a $200 billion cut in the U.S. bilateral trade deficit, as Chinese officials resisted committing to any specific targets after two days of contentious negotiations.

The two days of deliberations in Washington ended with both sides arguing all night on Friday over what to say in a joint statement, people briefed on the matter said. The Chinese had come willing to step up purchases of U.S. merchandise as a measure to narrow China’s $375 billion trade advantage. But U.S. negotiators pushed the Chinese delegates to approve a specific target of $200 billion in additional Chinese purchases. The Chinese refused any such target in specific dollar amounts, and the matter is now in the hands of President Donald Trump and President Xi Jinping, the people said.

The two sides released a joint statement shortly after the Chinese delegation was scheduled to return home, but it made no reference to the specific purchasing amounts that the U.S. had wanted.

“Both sides agreed on meaningful increases in United States agriculture and energy exports,” the statement said, adding that “the delegations also discussed expanding trade in manufactured goods and services. There was consensus on the need to create favorable conditions to increase trade in these areas.”

Chinese officials were wary of appearing to make concessions to Washington, and insisted the statement note that any Chinese purchases of U.S. goods and services are intended to “meet the growing consumption needs of the Chinese people.”

Beijing negotiators had come to Washington to settle a feud resulting from the Trump administration’s impatience with China’s large trade advantage. The U.S. side is also frustrated over allegations China pressures U.S. firms to transfer advanced technology and steals U.S. intellectual property. Washington has demanded China address these issues, under threat of U.S. tariffs on as much as $150 billion in Chinese goods. Should the U.S. make good on those threats, Beijing has promised to respond with its own tariffs on U.S. imports.

The procedural steps toward implementing the first tranche of threatened U.S. tariffs on $50 billion in Chinese imports could be completed by as early as next week, but in the joint statement, the two sides agreed to continue talking. New tariffs don’t appear imminent.

Liu He, the Chinese vice premier who led Beijing’s delegation, said “both sides agreed to avert a trade war and to stop imposing tariffs on each other,” the official Xinhua News Agency reported.

Souring the mood among Chinese officials were some U.S. media reports that China had accepted a U.S. request that Beijing slash its vast merchandise trade surplus by $200 billion, an amount that would cut by more than half the U.S. trade deficit with China. The Chinese side saw those reports as a last-minute effort by Trump administration officials to pressure Beijing into a public agreement that would meet U.S. objectives.

Early Friday, Larry Kudlow, director of the National Economic Council, had told reporters that China offered to boost its annual purchases of U.S. products by “at least $200 billion.” Mr. Kudlow also said “they are meeting many of our demands. There is no deal yet, to be sure.”

While Beijing has been wary of committing to numerical targets of specific purchase amounts, it has in general offered to buy more U.S.-made autos, energy and agricultural products as a way to ease the trade tensions between the two nations that have rattled global financial and commodities markets.

Mr. Liu, the head of the Chinese delegation, impressed Washington officials, Mr. Kudlow said in a Friday interview with White House reporters, adding that the vice premier is a “smart guy, a market guy.”

Source from : hellenicshippingnews

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