In a bid to release tensions between America and China concerning the trade war, China may be disposed to buy up to $200 billion worth of American goods in an initiative that will decrease the tremendous trade deficit with the US, according to several media reports.
Donald Trump announced that he would impose 25% tariffs that would amount to $150 billion against imported products Made in China. To counter, the Chinese government targeted $50 billion against American exports. The threats have not yet been implemented as of yet as the two countries are still trying to find a common ground of accord before taking drastic decisions.
Currently, China deployed a high-level delegation led by Vice Premier Liu He in Washington to negotiate with the White House. The talks will be held for two days and will conclude today as Liu is negotiating with US President Donald Trump.
“Chinese negotiators are preparing to offer the administration a deal to buy up to $200 billion worth of American goods, which would allow Trump to claim victory in his campaign to reduce the trade deficit with China and rebalance America’s trade relationship with its biggest economic rival, according to people briefed on the deliberations,” a report from The New York Times read.
However, the announcement met lots of skepticism from several economists who claim that the promises might be unfounded since China will struggle to buy additional American products and America might not be able to produce $200 billion worth of products to export to China.
A statement released by the White House said the US officials kept in mind the President’s wish to establish a fair-trading ground with China. Treasury Secretary Steven Mnuchin leads the appointed US delegation which includes the likes of Commerce Secretary Wilbur Ross and US Trade Representatives Robert Lighthizer.
“The United States officials and the Chinese delegation also participated in a meeting with President Donald J Trump at the White House. The two sides agreed to continue the discussions on Friday,” the White House statement revealed.
According to The New York Times, China vowed to buy a colossal amount of American goods, notably agricultural products like soybeans, semi-conductors and natural gas if the US agrees to forget the tariffs and investment restrictions it is threatening to impose against Chinese companies.
“That could theoretically reduce its trade surplus with the United States – which hit $372.5 billion last year – by up to $200 billion, though the real number would most likely be lower,” The New York Times said.
In the mean time, the US Congress will go forward with a resolution that will permit America to prevent deals between American and Chinese companies in an effort to reduce risk of national security, according to The Wall Street Journal.
America is the world’s largest economy; however it has a massive trade deficit of $500 billion with China, the second largest economy in the world.