FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song
May 18, 2018
By Steve Holland and David Lawder
WASHINGTON (Reuters) – China has offered U.S. President Donald Trump a package of proposed purchases of American goods and other measures aimed at reducing the U.S. trade deficit with China by some $200 billion a year, U.S. officials familiar with the proposal said.
The offer came during the first of two days of U.S.-China trade talks in Washington aimed at resolving tariff threats between the world’s two largest economies, but it was not immediately clear how the total value was determined.
One of the sources said U.S. aircraft maker Boeing Co <BA.N> would be a major beneficiary of the Chinese offer if Trump were to accept it. Boeing is the largest U.S. 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 $4 billion worth of U.S. farm products including fruit, nuts, pork, wine and sorghum.
The top-line number would match a request presented to Chinese officials two weeks ago by the Trump administration. But getting to a $200 billion reduction of the U.S. China trade deficit on a sustainable basis would require a massive change in the composition of U.S.-China trade, as the U.S. goods deficit was $375 billion last year.
The United States’ two biggest exports to China were aircraft at $16 billion last year, and soybeans, at $12 billion.
Trump met with the leader of the Chinese delegation, Vice Premier Liu He on Thursday, but the White House did not make any statement following the meeting.
Earlier on Thursday, Trump criticized China as being “very spoiled” on trade with the United States, but said he was aiming for an overall deal with China.
Speaking to reporters at the White House, Trump said China had “ripped off” the United States for too long and that he told Chinese President Xi Jinping that “we just can’t do that anymore.”
ZTE ‘SMALL COMPONENT’ OF DEAL
Trump also said that possible modifications to crushing restrictions that have paralyzed Chinese telecommunications equipment maker ZTE Corp <000063.SZ> <0763.HK> could be part of a trade deal. He said on Twitter on Sunday that he had ordered the U.S. Commerce Department to put ZTE back in business.
He said that Xi had asked him to look into the matter and he agreed to do so, adding that ZTE bought a lot of components from U.S. 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 up to $150 billion in punitive tariffs to combat what he says is Beijing’s misappropriation of U.S. technology through joint venture requirements and other policies. Beijing has threatened equal retaliation, including tariffs on some of its largest U.S. imports, including aircraft, soybeans and autos.
At trade talks in Beijing two weeks ago, both sides presented lengthy lists of demands, agreeing only to keep talking.
In addition to a major cut in the trade deficit, the Trump team sought an end to joint venture requirements that it says coerce technology transfers from American companies and an end to subsidies for advanced technology industries under the “Made in China” 2025 program.
China demanded that Trump relax the restrictions on ZTE and end restrictions on Chinese investments in the United States and sales of high-technology goods to China.
(Reporting by Steve Holland and David Lawder; Additional reporting by Doina Chiacu; Editing by Jonathan Oatis and Peter Cooney)