US, China say Beijing commits to buying more American goods

Clay Curtis
May 27, 2018

Two days of talks in Washington between high-level USA and Chinese delegations at the end of last week did not bring any substantial movement on the trade issues that have divided the two countries.

The statement, however, provided no dollar amounts on how much China might boost its purchases of American products.

President Trump's overriding concern for reducing the United States trade deficit does not just play out in his deal making efforts with China, but has implications for trade discussions with North America and Europe. "This will help support growth and employment in the United States", it continued. "But it's also a big positive across Asia given supply chain linkages to Chinese companies that ultimately export to the U.S.".

Following the meeting, the White House released a joint statement with China, saying there was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China.

Liu said both sides agreed to stop "slapping tariffs" on each other and called his visit "positive, pragmatic, constructive and productive", Xinhua reported. Most cars sold in China by global automakers are produced in local factories, but the tariff cut could give them more flexibility in supplying additional models produced overseas.

The two sides also agreed to strengthen cooperation on protecting intellectual property - a long-standing source of US discontent.

"Both sides want to reach some kind of deal".

The trade spat between the top two economies of the world began last month with Trump imposing tariffs on steel and aluminum imports into the US.

Observers said the U.S. president was busy defending him and blaming others since many - including manufacturing experts and at least one Republican lawmaker - believed he might have ceded too much and too soon to the Chinese while making trade negotiations with them, said one Vox report. One proposal would block the sale of ZTE products and those of another Chinese company, Huawei Technologies, until national security officials certify they are safe.

James Zimmerman, a Beijing-based lawyer and a former chairman of the American Chamber of Commerce in China, said the Trump administration's decision to walk back its threatened trade actions was premature and a "lost opportunity" for American companies, workers and consumers.

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The Trump administration opened talks with China earlier this month by sending a high-level delegation headed by Treasury Secretary Steven Mnuchin to Beijing. "Right now we have agreed to put the tariffs on hold while we try to execute the framework" of the agreement, Mr Mnuchin said.

However, there was somewhat different emphasis from Kudlow. "There is no reason for either side - particularly the US - to destroy the process that both sides are building, which is what imposing tariffs would do". "Tariffs are part of any negotiation, and tariffs have to be part of any enforcement".

The US has a $335b annual trade deficit with Beijing.

Prospects for USA energy exports to China got a boost in November, when China National Petroleum Corporation and United States natural gas producer Cheniere Energy reached an agreement on shipments of liquefied natural gas (LNG).

President Donald Trump on Monday said that the "barriers and tariffs" with China will "come down for first time" and that it had agreed to buy massive amounts of American farm products. Suppliers include some of the biggest US tech companies, including Alphabet Inc's Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc.

It was, in fact, conspicuous by its absence in Saturday's statement.

Senate Minority Leader Chuck Schumer, in a statement on Saturday, criticized the joint announcement for seeming to keep lighter penalties for ZTE on the table. "If the administration capitulates on ZTE and allows it to continue to exist, that will signal to President Xi that we are weak negotiators", he said. Reports in recent days indicated that China would increase purchases by $200 billion. "This is the key point behind the trade dispute between China and the United States". But he again cautioned that it was vital that Washington resolves issues about technology.

The president believes the massive USA trade deficit with China is proof that Beijing is engaged in abusive trading practices and has outmanoeuvred previous administrations in Washington.

Trump also pressed China to seal its border with North Korea "until a deal is made" - an apparent reference to his upcoming summit with North Korean leader Kim Jong Un.

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