WASHINGTON (AFP, BLOOMBERG, XINHUA) - China and the United States agreed to abandon any trade war and back off from threatened tariffs, China's vice-premier Liu He said on Sunday (May 20).
Mr Liu, who led a high-level Chinese delegation to Washington last week said: “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other."
China also said that it will “significantly increase purchases” of US goods, the White House said.
A joint statement released by the White House following the talks between the two countries did not place a dollar figure on the increased purchases by China, or address a comment by President Donald Trump’s top economic adviser suggesting that Beijing had agreed to slash its annual trade surplus with the US by US$200 billion (S$268 billion).
Mr Liu, a special envoy of Chinese President Xi Jinping, told reporters in Washington that talks with US officials, including Treasury Secretary Steven Mnuchin, Secretary of Commerce Wilbur Ross and US Trade Representative Robert Lighthizer, ended with a pledge not to engage in a trade war, according to a Xinhua news agency report.
Mr Liu said the two sides agreed to stop “slapping tariffs” on each other, Xinhua reported. He added that his trip to the US had been positive, pragmatic, constructive and productive.
Trade cooperation would be enhanced in such areas as energy, agriculture, health care, high-tech products and finance, a “win-win” choice for both nations.
China agreed to “meaningful increases in US agriculture and energy exports”, the White House said, adding that the United States will send a team to China to work out the details.
“There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China,” the White House said.
The delegations also discussed expanding trade in manufactured goods, and each side agreed to strengthen cooperation on intellectual property.
China will “advance relevant amendments” to its laws and and regulations in that area, including its patent law, the White House said.
The White House joint statement did not mention additional US demands, including a halt to subsidies and other government support for the Made in China 2025 plan that targets strategic industries from robotics to new-energy vehicles.
China had made its own demands, including giving equal treatment to its investment, and warned that US companies may be excluded from measures to open its economy.
Last Friday (May 18) morning, Mr Larry Kudlow, director of the National Economic Council, told reporters that China had offered to reduce its annual trade surplus with the US by “at least US$200 billion”.
“The number’s a good number,” Mr Kudlow said outside the White House.
Earlier, two posts on Chinese state social media disputed a report that China planned to slash its trade surplus by the extent demanded by Washington though increased imports of US products. A foreign ministry official also played down the suggestion.
In a sign that the Chinese government is seeking a conciliatory stance, it announced last Friday it was ending an anti-dumping and anti-subsidy investigation into imports of US sorghum, citing “public interest”.
That move came days after it restarted a review of Qualcomm’s application to acquire NXP Semiconductors.
A US$200 billion reduction in the US trade gap with China by 2020 was on a list of demands the US made earlier this month as Mr Mnuchin led a delegation to Beijing. That mission left with little common ground with China and reports emerging of infighting among the US officials.
The US merchandise trade deficit with China hit a record US$375 billion last year.
Mr Mnuchin and Mr Kudlow will appear on US political talk shows on Sunday.
Mr Trump’s administration has threatened to impose tariffs on as much as US$150 billion of Chinese imports to the US as tensions over trade have escalated. Mr Trump expressed doubt before his meeting with Mr Liu that China and the US would come to an agreement to avoid a damaging trade war.
Top Senate Democrat Chuck Schumer criticised a lack of specific measures in the joint statement to protect US intellectual property and stop China “from keeping our best goods until we hand over our trade secrets”.
Mr Schumer noted that the statement also did not mention ZTE, the Chinese telecom company that Mr Trump a week ago ordered the US Commerce Department to get help back into business after “too many jobs in China lost” because of recent US action.
“If the administration capitulates on ZTE and allows it to continue to exist, that will signal to President Xi that we are weak negotiators,” said Mr Schumer.
Mr Kudlow said last Friday that ZTE may need to change its management to win a reprieve from US sanctions that shut it off from key parts suppliers.