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China offering Trump package to slash U.S. trade deficit, officials say

Reuters  |  WASHINGTON 

By and David Lawder

(Reuters) - is offering U.S. a package of trade concessions and increased purchases of American goods aimed at cutting the U.S. trade deficit with by up to $200 billion a year, U.S. officials familiar with the proposal said.

of the offer came during the first of two days of U.S.-trade talks in focused on resolving tariff threats between the world's two largest economies. But it was not immediately clear how the total value was determined.

One of the sources said U.S. would be a major beneficiary of the Chinese offer if Trump were to accept it. Boeing is the largest U.S. exporter and already sells about a quarter of its commercial aircraft to Chinese customers.

Another person familiar with the talks said the package may include some elimination of Chinese tariffs already in place on about $4 billion worth of U.S. including fruit, nuts, pork, wine and sorghum.

A statement described the meetings as part of "ongoing trade discussions" and said Trump met with the Chinese delegation led by and the U.S. team led by

"The officials conveyed the President's clear goal for a fair trading relationship with China," the said.

The top-line number in the Chinese offer would largely match a request presented to Chinese officials two weeks ago by officials in

But getting to a $200 billion reduction of the U.S. China trade deficit on a sustainable basis would require a massive change in the composition of trade between the two countries, as the U.S. goods deficit was $375 billion last year.

The United States' two biggest exports to China were aircraft at $16 billion last year, and soybeans, at $12 billion.

'ENORMOUS NUMBER'

Some China trade watchers expressed skepticism that such a $200 billion reduction could be achieved quickly and said the offer may include repackaged commitments previously announced by China.

"That's an enormous number and it suggests that there could be some impressively ambitious accounting," said Scott Mulhauser, a former at the in and U.S. who now advises companies on trade issues.

Agreeing to a deal focused primarily on reducing the trade deficit could also weaken Trump's original tariff goal of pressuring China to end policies that his administration says are aimed at misappropriating U.S. technology - a bigger structural change for China's state-driven economic model.

The U.S. officials did not have details on China's demands in exchange for the concessions. reported that China was asking Trump to set aside threats of tariffs on Chinese goods and U.S. investment restrictions on Chinese companies.

also reported that China wanted a relaxation of U.S. export controls that ban American firms from selling to China.

Earlier on Thursday, Trump criticized China as being "very spoiled" on trade with the United States, but said he was aiming for an overall deal with China.

Speaking to reporters at the White House, Trump said China had "ripped off" the for too long and that he told Chinese that "we just can't do that anymore."

ZTE 'SMALL COMPONENT' OF DEAL

Trump also said that possible modifications to crushing restrictions that have paralyzed Chinese could be part of a trade deal. He said on on Sunday that he had ordered the to put ZTE back in business.

He said that Xi had asked him to look into the matter and he agreed to do so, adding that ZTE bought a lot of components from U.S. companies.

"Anything we do with ZTE, it's just a small component of the overall deal. I can only tell you this: We're going to come out fine with China. Hopefully, China will be happy, I think we'll be happy," Trump said.

Trump has threatened to impose up to $150 billion in punitive tariffs to combat what he says is Beijing's misappropriation of U.S. technology through joint venture requirements and other policies. has threatened equal retaliation, including tariffs on some of its largest U.S. imports, including aircraft, soybeans and autos.

(Reporting by and David Lawder; Additional reporting by Doina Chiacu; Editing by and Peter Cooney)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 18 2018. 08:16 IST
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