China offers to make US farm purchases as officials prepare for trade talks

This story is published in a content partnership with POLITICO. It was originally reported by Adam Behsudi on politico.com on September 6, 2019. China made a peace proposal in a phone call this week with top US trade officials with an offer to buy a modest amount of US agricultural goods, according to two people briefed on the call. That offer, however, could be contingent on the United States easing export restrictions on Chinese tech giant Huawei and delaying an October 1 tariff escalation on roughly US$250 billion in goods, the people said. Depending on how negotiations proceed, US President Donald Trump is also considering delaying another round of tariffs that will be imposed on December 15 on almost all remaining imports from China, including laptops, smartphones and other consumer goods, the people said. Political donors and executives from major companies such as Wal-Mart made a push two weeks ago hoping to persuade Trump to back off the December round of tariffs, which would severely hurt consumers, one of the people said. White House economic adviser Larry Kudlow indicated Friday the trade talks are “going to heat up” when Chinese officials come to Washington in the coming weeks. In announcing the meeting, the two governments also said they are hoping for “meaningful progress”. Deputy-level officials from the US and China are expected to hold discussions in mid-September to prepare for a meeting of top officials in early October. “I don’t want to predict anything. I’m just saying it is a good thing that they’re coming here, and tempers are calmer now,” Kudlow said on CNBC on Friday. “We’re engaged in very important discussions across the board, whether it’s agriculture or IP or tech transfer or cloud or cyber-hacking or trade barriers.” Kudlow said the call on Wednesday involving Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin “went very well”. The US Trade Representative’s office did not reply to a request for comment. Talks with China collapsed in early May after Beijing backtracked on commitments it made in a 150-page draft agreement to enshrine certain obligations in its domestic law. The US wants China to address policies that it says force American companies to hand over valuable technology or intellectual property to do business in the country. Trade deal could come as US-China economies slow “We would love to go back to where we were in May – where we were getting kind of close to an agreement, maybe 90 per cent of the way. But I don’t want to predict,” Kudlow said. Trump has also demanded that China significantly increase purchases of US farm commodities such as soybeans and corn. China is one of the biggest markets for US agriculture exports, and farmers have been hit hard by China’s retaliation to US tariffs. But Beijing has informally tied any agricultural purchases to the US treatment of Huawei. The telecommunications company was blacklisted by the Trump administration in May, effectively cutting it off from US semiconductor suppliers. The Commerce Department has reviewed dozens of applications from US chip makers requesting a waiver to ship to Huawei, but none of those have yet been approved. The two sides are still far from a larger deal. So far, Beijing has been unwilling to make any major concessions to address issues that the US says result in widespread theft of American technology. Still, a partial deal could calm financial markets that have been whipsawed by almost every development in the nearly two-year-old trade fight. The ‘struggle’ is real: analysing China's pork crisis, Xi's speech and new trade talks The US Chamber of Commerce released an analysis on Friday that showed 43 per cent of executives at Fortune 500 companies have raised or addressed concerns over the duties. The report comes amid growing signs that the escalating tariffs are slowing US economic growth and may even be directing the country toward a recession. “At this moment of uncertainty, it is critical that our leaders take decisive steps to bolster the economy and avoid actions that could turn talk of recession into reality,” Chamber CEO Tom Donohue wrote in a recent op-ed. “For the Trump administration’s part, the escalation of trade tensions with China must come to an end.” https://www.politico.com/story/2019/09/06/china-farm-purchases-trade-talks-1712691