China agrees to import more from US
20 May, 2018, 2:20 pm
WASHINGTON (Reuters) – China has agreed to significantly increase its purchases of U.S. goods and services, the two countries said on Saturday, but made no mention of a $200 billion target the White House had touted earlier.
Beijing and Washington agreed they would keep talking about measures under which China would import more energy and agricultural commodities from the United States to close the $335 billion annual U.S. goods and services trade deficit with China.
A joint statement issued at the conclusion of intensive trade talks in Washington did not indicate whether the two countries would delay or drop their tariff threats on billions of dollars worth of each country’s goods, which has sparked fears of a wider trade war and roiled financial markets.
“There was a consensus on taking effective measures to substantially reduce the United States’ trade deficit in goods with China,” the joint statement said.
“To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services.”
A report by China’s state-run Xinhua news agency described the statement from the two governments as “vowing not to launch a trade war against each other.”
While the statement said the two sides would engage at high levels and “seek to resolve their economic and trade concerns in a proactive manner,” it made no mention of tariffs.
It said there was consensus between Washington and Beijing on the need to create “favorable conditions to increase trade” in manufactured goods and services. This could be a reference to China’s previous pledges to open up more economic sectors to services.
U.S. LNG EXPORTS
The United States will also send a team to China to work out the details of increased agricultural and energy exports, the countries said, without specifying timing.
A senior U.S. official said that during discussions with a member of President Xi Jinping’s office, China was considering a package that relied on major purchases of U.S. liquefied natural gas, including a contract for a U.S. firm to build LNG receiving and processing facilities in China.
The package, which also would include new commitments on intellectual property protections, could be agreed by a potential mid-year visit to Washington by China’s Vice President Wang Qishan, the official said.
Trump made cutting the U.S. trade deficit with China a promise in his presidential campaign.
During an initial round of talks earlier this month in Beijing, Washington demanded that China reduce its trade surplus by $200 billion – a figure most economists say is impossible to achieve because it would require a massive change in the composition of commerce between the two countries.
As of late Thursday, U.S. officials were still pressing China to agree to that size reduction.
But economists say that level would be extremely difficult to achieve, especially as U.S. tax cuts are spurring demand for more imports. The $200 billion figure is equivalent to about 90 percent of Boeing Co’s (BA.N) annual aircraft production and is larger than all of the United States’ global annual agricultural and oil exports.