China has offered to buy close to $70 billion in U.S. agriculture, energy and manufacturing products in the first year of a package meant to ward off U.S. tariffs, said a person briefed on talks with the White House.
The offer was made in talks in Beijing over the weekend with Commerce Secretary Wilbur Ross, part of sensitive trade negotiations that could force President Trump to make a tough decision about accepting this proposal or pushing for more concessions.
The package would include increased purchases of U.S. soybeans, corn and other agricultural goods. In addition, China would buy more U.S. crude oil and natural gas exports to quench its thirst for energy.
The news was first reported by the Wall Street Journal.
“If the numbers are accurate, an additional $70 billion in US exports to China would be considerable — a 50 percent increase in US exports from 2017 levels,” Chad Bown, a senior fellow at the Peterson Institute for International Economics, said in an email. “Ongoing negotiations are a good sign and are certainly better than a tariff war.”
But he said even that amount “would not address the underlying, long-run concerns the United States has with China.” Those include China’s assistance to state-owned enterprises, investment restrictions on foreign firms, forced technology transfer, industrial policy, and the protection of intellectual property.
The purchases of more crude oil and natural gas would be unlikely to increase total U.S. exports of the fuels, as they would probably divert U.S. exports previously intended for other destinations. The United States only recently started exporting oil and gas, thanks to the increased exploitation of shale gas and shale oil. However, the United States remains a large net importer of petroleum.
After the talks in Beijing, the Chinese negotiating team led by Vice Premier Liu He issued a statement saying “the two sides have had good communication in various areas such as agriculture and energy, and have made positive and concrete progress while relevant details are yet to be confirmed by both sides.”
The White House has said that it might move ahead with the imposition of tariffs on $50 billion of Chinese goods around the middle of this month if a broad agreement to slash the $375 billion trade deficit isn’t reached.