(Updated; last posted at 3:53 p.m.)
China denied on Friday that it had offered a package to slash the US trade deficit by up to US$200 billion, hours after it dropped an anti-dumping probe into US sorghum imports in a conciliatory gesture as top officials meet in Washington, Reuters reports.
US officials had said in Washington on Thursday that China was proposing trade concessions and increased purchases of American goods aimed at cutting the US trade deficit with China by up to US$200 billion a year.
“This rumor is not true. This I can confirm to you,” Chinese foreign ministry spokesman Lu Kang told a regular news briefing.
“As I understand, the relevant consultations are ongoing and they are constructive,” he said, adding that he could not elaborate on the specifics of the negotiations.
Chinese Vice Premier Liu He is in Washington this week for talks with US officials led by US Treasury Secretary Steven Mnuchin aimed at heading off a trade war between the world’s two biggest economies.
Earlier on Friday, China announced that it was ending its sorghum investigation, which had effectively halted a trade worth roughly US$1.1 billion last year.
“The imposition of anti-dumping and anti-subsidy measures on imports of sorghum originating from the United States would have a widespread impact on consumer living costs, and does not accord with the public interest,” the Commerce Ministry said in a statement.
Getting to a US$200 billion reduction of the US-China trade deficit on a sustainable basis would require a massive change in the composition of trade between them, and the news had been met with skepticism from economists.
The US goods deficit was US$375 billion last year.
One US source said earlier US aircraft maker Boeing Co. would be a major beneficiary of the Chinese offer to narrow the trade gap if Trump were to accept it. Boeing is the largest US exporter and already sells about a quarter of its commercial aircraft to Chinese customers.
Another person familiar with the talks said the package may include some elimination of Chinese tariffs already in place on about US$4 billion worth of US farm products including fruit, nuts, pork, wine and sorghum.
A White House statement described the meetings as part of “ongoing trade discussions” and said Trump met the Chinese delegation led by Liu and the US team led by Mnuchin.
“The United States officials conveyed the president’s clear goal for a fair trading relationship with China,” the White House said.
That top-line number in the Chinese offer would largely match a request presented to Chinese officials by Trump administration officials in Beijing two weeks ago.
The two biggest US exports to China were aircraft at US$16 billion last year, and soybeans, at US$12 billion.
The United States shipped 4.76 million tons of sorghum to China in 2017, worth about US$1.1 billion, accounting for the bulk of Chinese imports of the grain used in animal feed and Chinese liquor.
In April, China forced US sorghum exporters to put up a 178.6 percent deposit on the value of sorghum shipments to the country after launching an investigation in February following Trump’s imposition of steep tariffs on imports of solar panels and washing machines.
“China has taught a lesson to the United States and showed how it can hurt US exports,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.
“Now they are showing goodwill by halting its anti-dumping investigation into sorghum imports, but it is a cheap way of showing goodwill as the US doesn’t have much sorghum left to export. The next US sorghum crop will be harvested in August,” Houe said.
Trump criticized China earlier on Thursday as being “very spoiled” on trade with the US but said he was aiming for an overall deal with Beijing.
Trump told reporters at the White House China had “ripped off” the US for too long and that he told Chinese President Xi Jinping that “we just can’t do that anymore”.
He also said possible modifications to crushing restrictions that have paralyzed Chinese telecommunications equipment maker ZTE Corp. could be part of a trade deal. He said on Twitter on Sunday he had ordered the US Commerce Department to put ZTE back in business.
Trump said he agreed to Xi’s request to look into the matter and that ZTE bought a lot of components from US companies.
“Anything we do with ZTE, it’s just a small component of the overall deal. I can only tell you this: We’re going to come out fine with China. Hopefully, China will be happy, I think we’ll be happy,” Trump said.
Trump has threatened to impose tariffs on up to US$150 billion of Chinese goods to combat what he says is Beijing’s misappropriation of US technology through joint venture requirements and other policies. Beijing has threatened equal retaliation, including tariffs on some of its largest US imports, including aircraft, soybeans and autos.
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