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China offered to buy $70 billion of US agriculture, energy products: report

Imported soybeans at a Chinese port Photo: Reuters

China would buy nearly $70 billion worth of US agriculture and energy products if the Trump administration steps back from tariffs, the Wall Street Journal reported on Tuesday, citing sources briefed on the latest talks with US trade officials.

The Chinese negotiators proposed at a meeting this weekend in Beijing between US Commerce Secretary Wilbur Ross and Chinese Vice Premier Liu He a package in which the country bought more US farm and energy products such as soybeans, corn, natural gas, crude oil and coal, the report said.

The offer would go only partway toward US President Donald Trump's initial demand that China reduce its $375.2 billion trade surplus with the United States by $200 billion annually. And it leaves untouched other American requests, including that China allow American companies more access to its markets and end practices that the Trump administration and business executives say force companies to transfer valuable intellectual property.

Members of the US Department of Agriculture also participated in the talks during the weekend.

"If the numbers are accurate, an additional $70 billion in US exports to China would be considerable — a 50 percent increase in US exports from 2017 levels," Chad Bown, a senior fellow at the Peterson Institute for International Economics, said in an email. 'Ongoing negotiations are a good sign and are certainly better than a tariff war."

But he said even that amount "would not address the underlying, long-run concerns the United States has with China." Those include China's assistance to state-owned enterprises, investment restrictions on foreign firms, forced technology transfer, industrial policy, and the protection of intellectual property.

The purchases of more crude oil and natural gas would be unlikely to increase total US exports of the fuels, as they would probably divert US exports previously intended for other destinations. The United States only recently started exporting oil and gas, thanks to the increased exploitation of shale gas and shale oil. However, the United States remains a large net importer of petroleum.

After the talks in Beijing, the Chinese negotiating team led by Liu issued a statement saying "the two sides have had good communication in various areas such as agriculture and energy, and have made positive and concrete progress while relevant details are yet to be confirmed by both sides."

But a New York Times report said that the Chinese proposal could fizzle quickly. Chinese officials have said publicly that any agreements would be void if the United States continued with plans to impose tariffs and other restrictions, and American officials have given no indication so far that they intend to halt the tariffs.

Sarah Huckabee Sanders, the White House press secretary, would not comment on whether the Chinese proposal would pass muster with Trump, saying on Tuesday that "we're in the negotiation process" and that "our focus is to make sure we get good deals."

The White House has said that it might move ahead with the imposition of tariffs on $50 billion of Chinese goods around the middle of this month if a broad agreement to slash the $375 billion trade deficit is not reached.

The recent round of discussions in Beijing was more narrowly focused on potential Chinese purchases of American products, a goal that has angered some China critics who fear that Ross and US Treasury Secretary Steven Mnuchin are sacrificing the bigger concessions by China that many feel are needed. That includes Democrats, who have also pressed Trump to push China to open its markets and have criticized the president for focusing on the trade deficit at the expense of other goals.

Economists have also expressed skepticism about China's potential to purchase tens of billions of dollars of additional products from the United States, arguing that the American economy is already operating near its full potential. If China does ramp up purchases of energy and agricultural goods, they say, it would simply displace those purchases from other nations, making little lasting impact on the overall trade deficit or the American economy.

China is willing to increase imports from other countries, including the United States, China's official Xinhua News Agency said in a report on Sunday, citing a statement from the Chinese side of negotiations.

However, the statement warned that "all economic and trade outcomes of the talks will not take effect if the US side imposes any trade sanctions including raising tariffs," Xinhua reported.
 


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