China offered to reduce its trade surplus with the U.S. by "at least $200 billion" in talks to head off a possible trade war, the director of the White House National Economic Council said.
"The number's a good number," Larry Kudlow, President Donald Trump's top economic adviser, told reporters at the White House on Friday. "I think just as important, they have to lower their tariff rates, they have to lower their nontariff barriers. We have to have a verifiable process whereby the technology transfers and the theft of intellectual property stops."
Earlier on Friday, a Chinese Foreign Ministry official and posts on Chinese state social media accounts disputed reports that Chinese officials had offered a $200 billion reduction in its trade surplus through increased imports of American goods. According to a Trump administration official, the offer came during talks in Washington this week led by China's vice premier, Liu He.
"China's come to trade; they are meeting many of our demands," Kudlow said. "There's no deal yet to be sure -- it's probably going to take a while. It's a process. But they're coming to play. I believe they want to make a deal."
In a sign that the Chinese government is seeking a conciliatory stance, it announced Friday that it would end its anti-dumping and anti-subsidy investigation into imports of U.S. sorghum, citing "public interest." It has also given approval for a U.S. private-equity firm to buy Toshiba's memory chip business.
A $200 billion reduction in the U.S. trade gap with China by 2020 was on a list of demands the Trump administration made earlier this month as Treasury Secretary Steven Mnuchin led a delegation to Beijing. That mission left with little common ground with China and reports emerging of infighting among the U.S. officials. The U.S. merchandise trade deficit with China hit a record $375 billion last year.
The U.S. had earlier made additional demands, including a halt to subsidies and other government support for the Made in China 2025 plan that targets strategic industries from robotics to new-energy vehicles. China had made its own demands, including giving equal treatment to its investment, and warned U.S. companies may be excluded from measures to open its economy.
The Trump administration has threatened to impose tariffs on as much as $150 billion of Chinese imports to the U.S. as tensions over trade have escalated. Trump expressed doubt before his meeting with Liu that China and the U.S. would come to an agreement to avoid a damaging trade war.
The Chinese Commerce Ministry said it was ending the anti-dumping probe and a parallel anti-subsidy investigation because they would have raised costs for Chinese consumers.
The U.S. is China's biggest supplier of sorghum, accounting for more than 90 percent of its total imports. China's investigation, launched in February, had come as a warning shot to American farmers, many of whom support the Trump administration yet depend heavily on trade. They feared they would lose their largest export market for the crop, which is used primarily for animal feed and liquor.
"Anti-dumping and countervailing measures against imported sorghum originating in the United States would affect the cost of living of a majority of consumers and would not be in the public interest," according to a notice posted on the Commerce Ministry website.
China's U.S. sorghum imports surged from 317,000 metric tons in 2013 to 4.76 million tons last year. Prices fell by about a third over the same period.
Trump had told reporters Thursday that he had doubts about the potential for an agreement. He also raised fresh uncertainty about resolving a case involving ZTE, the Chinese tech giant that had been hit with a crippling seven-year ban on buying from U.S. suppliers, forcing it to halt major operations. Trump said ZTE "did very bad things" to the U.S. economy and would be a "small component of the overall deal."
Song Lifang, an economics professor and trade expert at Renmin University, said it's clear that haggling is underway.
"It's time for both to present their demands, but it's also a time to exhibit their bargaining chips," said Song.
Song added that approval for the Toshiba deal, worth $18 billion, was "an apparent sign of thaw" amid a U.S. investigation into Chinese trade practices requiring U.S. companies to turn over their technology in exchange for access to China's market.
The Trump administration has proposed tariffs on up to $150 billion in Chinese products to punish Beijing. China has responded by targeting $50 billion in U.S. imports. Neither country has yet imposed tariffs.
Trump said Friday that his team was working on trade deals that are "going to be great for our country. Our country has been ripped off long enough. And we are making great deals."
On Thursday, though, his top trade negotiator, Robert Lighthizer, said that after nine months of talks, the U.S., Canada and Mexico still were "nowhere close to a deal" to rewrite the North American Free Trade Agreement, a 24-year-old pact that Trump has called a job-killing disaster.
Lighthizer mentioned "gaping differences" on issues ranging from farm trade to labor standards to intellectual property protections. The impasse makes it increasingly unlikely that Trump's trade team can deliver a rewritten NAFTA in time for a congressional vote this year.
Information for this article was contributed by Justin Sink of Bloomberg News; and by Paul Wiseman, Kelvin Chan, Shanshan Wang, Yu Bing and Liu Zheng of The Associated Press.
Business on 05/19/2018