China is preparing to make certain concessions to avoid a trade war with President Donald Trump.
To prevent a conflict, China is willing to offer the U.S. greater domestic market access for American beef exports and investments in the financial sector, reports the Financial Times, citing Chinese and American officials involved in recent negotiations. While these are relatively simple concessions, the shift could represent a move towards a fairer, more balanced U.S.-China trade relationship.
During their meeting at Mar-a-Lago last week, Trump and Chinese President Xi Jinping agreed to a 100-day trade plan to address imbalances. The U.S. trade deficit with China last year was $347 billion, an alarming figure the new administration is eager to change.
Rather than targeting Chinese exports through punitive actions, the aim of the plan proposed during the meeting appears to be increases in American exports to China through the reduction of trade barriers.
China has reportedly indicated that it is willing to lift the 2003 ban on U.S. beef imports and raise investment ceilings, low-hanging fruit easy for the Chinese to concede.
“U.S. negotiators are pushing on a door that is relatively easy to open when they place a priority on improving the trade balance not by limiting Chinese exports to the U.S., but by increasing U.S. exports to China,” Andrew Nathan, a China expert at Columbia University, told the Financial Times.
There are still countless issues to address. For instance, the U.S. would also like to see China lower its 25 percent tariff on auto imports, and China would like the U.S. to remove export restrictions on high-tech exports and provide greater protection for Chinese investments in America.
Trump previously threatened to label China a currency manipulator and slap high tariffs on Chinese exports, but his rhetoric has softened since he took office; however, there is evidence that he may be offering a carrot before he brings out the stick. The administration is presently investigating the primary sources of the U.S. trade deficit, the largest of which is China, and taking action to ensure that the U.S. can respond to countries that unfairly subsidize their industries.
“Goodwill and friendship was formed,” Trump tweeted after his meeting with the Chinese president, adding, “But, only time will tell on trade.”
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