China Offers to Buy Extra $10B of US Goods to Ease Trade War (FT)
Last Modified: 05:44 AM, Wed Oct 09, 2019

By Tom Mitchell in Beijing 09 October 2019

Proposal for increased agricultural purchases aimed at ‘reset’ ahead of Washington talks

Chinese officials are offering to increase purchases of US agricultural products by $10bn a year as they seek an interim agreement between Beijing and Washington that will stave off a new round of tariff hikes on October 15, according to people briefed on the two countries’ ongoing negotiations.

China’s lead trade negotiator, Vice Premier Liu He, is scheduled to begin two days of talks with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday, followed by a meeting with President Donald Trump on Friday if the discussions go well.

“Liu He is coming with real offers, it’s not an empty visit,” said one of the people briefed on the talks. “The Chinese are ready to de-escalate.”

Both sides hope to avoid another round of tariff hikes and counter-hikes scheduled to take effect on October 15. They want to “reset” the troubled talks ahead of a potential November meeting between Mr Trump and his Chinese counterpart, Xi Jinping, at the annual summit of Asia Pacific Economic Conference leaders in Chile in mid-November.

Despite US sanctions announced this week against Chinese companies and officials allegedly involved in human rights abuses in Xinjiang, Mr Liu’s team is offering to boost annual agricultural purchases to $30bn annually, from about $20bn at present.

China would also make a raft of changes to non-tariff barriers that have long frustrated the US Department of Agriculture and American farmers.

“China has fundamentally agreed to all of the USDA’s demands on beef, pork and lamb,” a second person said. “They’ve got about 60 internal changes to their [import] process that they’ve agreed to.”

“They’re taking great note of how [Trump’s] new Japan [trade] deal . . . led with agriculture and they are pushing in that same direction,” the person added.

The partial deal signed last week by Mr Trump and Japanese Prime Minister Shinzo Abe focused on agriculture with more difficult issues, including autos, intellectual property and services, to be addressed in a more comprehensive second-phase agreement.

Chinese negotiators hope their agriculture-related concessions, combined with previously announced market opening measures in areas such as financial services, will provide the basis for a similar interim agreement with the US.

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Organization: Government of China, US Government, Agriculture Department
Location: Xinjiang, Japan, Asia, Chile, US, Asia-Pacific, China
People: Donald Trump, Xi Jinping, Robert Lighthizer, Shinzo Abe, Steven Mnuchin, Liu He, Tom Mitchell
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