China offered to purchase nearly $70 billion of U.S. farm, manufacturing and energy products if the Trump administration abandons threatened tariffs, according to people briefed on the latest negotiations with American trade officials.
In weekend talks in Beijing, Chinese negotiators led by Liu He, President Xi Jinping’s economic envoy, presented a U.S. team headed by Commerce Secretary Wilbur Ross a package that includes Chinese companies buying more U.S. soybeans, corn, natural gas, crude oil, coal and manufactured goods.
Chinese and U.S. officials estimated the value of the package at nearly $70 billion in the first year.
President Donald Trump has pressed China to commit to reduce the $375 billion U.S. merchandise trade deficit with China by $200 billion. Chinese officials are arguing this could go a long way toward meeting that target.
Throughout the negotiations, Mr. Liu made clear to Mr. Ross that the offer would be void if Washington proceeds with its plan to impose tariffs on $50 billion of China-made products, the people briefed on the talks said.
That proviso could make the deal a non-starter in Washington, where the White House has said it plans to move ahead with the tariffs shortly after June 15, as a way to pressure China to make more sweeping changes in its economy.
The U.S. wants Beijing to stop pressuring U.S. firms to transfer technology to their Chinese partners and halt what the U.S. considers unfair subsidies and other aid to Chinese firms that compete internationally for advanced technology.
Mr. Ross briefed Mr. Trump on the results of his weekend trade mission on Monday, and plans to continue discussing details of his trip with other U.S. trade officials on Tuesday, according to people familiar with the negotiations.
U.S. officials are skeptical of the Chinese offer for several reasons, said people involved with the talks. They argue that Chinese energy purchases would largely divert U.S. sales to other nations and have no overall impact on the U.S. trade deficit. They also aren’t sure that the U.S. could ramp up agriculture production that quickly.
The White House said early last week that it would go ahead with the levies and other sanctions to restrict China’s access to U.S. technology and punish Beijing for what the U.S. says are unfair trade practices.
The decision, which came less than two weeks after both sides declared a truce in their simmering trade dispute, complicated the mission of Mr. Ross, who originally scheduled the Beijing trip with the goal of securing a deal but left Beijing late Sunday without a settlement.
During the discussions, Chinese negotiators also raised the question of whether the U.S. was moving ahead with Mr. Trump’s pledge early last month to save China’s ZTE Corp. from crippling U.S. sanctions, the people briefed on the talks said. That pledge has been opposed by some U.S. lawmakers.
China’s offer would benefit the Farm Belt states that helped Mr. Trump win the election in 2016. By promising to buy more American soybeans, corn and other agricultural products, China pledged to ease certain regulations to boost its imports of those goods, the people said.
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- U.S. Moves Ahead on China Trade Curbs, Catching Beijing Off Guard (May 29)
- China Agrees to Buy More U.S. Goods and Services (May 18)
The Chinese team also promised to get state-owned companies to buy more U.S. natural gas, though it could take some time for American firms to ramp up production. By potentially boosting Chinese imports of U.S. coal, Beijing is targeting states like Pennsylvania and West Virginia that are key to the U.S. midterm elections, the people said.
But the offers didn’t include a signed deal. “Nothing has firmed up yet,” one of the people said, referring to the Chinese offer. “It would require additional rounds of discussions between the two sides.”
In a tweet Monday, President Trump wrote: “Farmers have not been doing well for 15 years. Mexico, Canada, China and others have treated them unfairly. By the time I finish trade talks, that will change.”