U.S.-China trade truce

U.S.-China trade truce

China's top economic advisor, Vice Premier Liu He, lead a delegation that meet with President Donald Trump's economic team. Representatives from the U.S. and China met earlier this month in Beijing, but talks ended with disagreements over critical issues largely unresolved. The U.S. submitted a list of demands that included a 200 billion USD cut in the U.S.'s trade deficit with China by 2020, an end to Chinese government subsidies for advanced technologies and a reduction in tariffs on American products. The list of demands also requested China improve market access for U.S. agricultural products and adopt strengthened intellectual property rights protection and enforcement policies. China, meanwhile, urged the U.S. to stop imposing 25 percent extra tariffs on Chinese products and to refrain from initiating any Section 301 investigation against China in the future, among other demands.

So now the U.S. and China are pulling back from the brink of a trade war after the world's two biggest economies reported progress in talks aimed at bringing down America's massive trade deficit with Beijing. "We are putting the trade war on hold," Treasury Secretary Steven Mnuchin said Sunday.

After high-level talks last Thursday and Friday in Washington, Beijing agreed in a joint statement with the U.S. to "substantially reduce" America's trade deficit with China, but did not commit to cut the gap by any specific amount. The Trump administration had sought to slash the deficit by 200 billion USD. Still, Mnuchin said the two countries had made "meaningful progress" and that the administration has agreed to put on hold proposed tariffs on up to 150 billion USD in Chinese products. China had promised to retaliate in a move that threatened a tit for tat trade war.

He said they expect to see a big increase — 35 percent to 45 percent this year alone — in U.S. farm sales to China. Mnuchin also forecast a doubling in sales of U.S. energy products to the Chinese market, increasing energy exports by 50 billion to 60 billion USD in the next three years to five years.