China ‘offered to buy US$70 billion in American products to remove tariffs’

China has reportedly told the US it will buy agricultural and energy products, including soybeans, corn, natural gas, crude oil and coal - but if Donald Trump imposes tariffs, the deal is off

PUBLISHED : Wednesday, 06 June, 2018, 1:08am
UPDATED : Wednesday, 06 June, 2018, 3:26am

China has offered to buy almost US$70 billion of US products in exchange for the removal of tariffs placed by the Trump administration against Chinese products, it was reported on Tuesday.

Chinese vice-premier and lead negotiator Liu He told his Washington counterpart in the discussions, Commerce Secretary Wilbur Ross, that Beijing would buy American agricultural and energy products including soybeans, corn, natural gas, crude oil and coal, The Wall Street Journal said.

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But Liu told US negotiators that offer would be rescinded if the Trump administration imposed US$50 billion in long-threatened tariffs, people briefed on the latest negotiations told the newspaper.

The US is demanding that China reduce an existing US$375 billion trade deficit by US$200 million, cease state funding to Chinese companies that compete internationally, and stop Chinese companies from taking intellectual property from US companies as a prerequisite for doing business.

It has promised to impose the tariffs by July 15 if no deal can be brokered.

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The package targets products produced in states that are key to Republican political power, including the US farm belts that supported Trump in the 2016 presidential election.

Increased purchases of coal and natural gas from the US would also pump money into states such as Pennsylvania and West Virginia that will be Republican targets in November’s midterm elections, the sources said.

Ross informed Trump of China’s proposed package on Monday and will continue trade talks on Tuesday, the insiders said.

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They added that Chinese officials had asked for confirmation that Trump would move ahead with his planned reprieve for Chinese telecom firm ZTE, which had sanctions placed on it for failing to follow through on reforms after it was found to be dealing with Iran.

Those sanctions - including banning it from dealing with US companies for seven years - effectively caused it to shut down, impacting Beijing’s planned “Made in China 2025” programme for superiority in AI, robotics and other technological fields.