China offers to go on $1Trillion “shopping spree” to reduce U.S. trade deficit
A lasting truce in the “trade war”?
In the midst of the clash between President Trump and Speaker Nancy Pelosi and Buzzfeed rumors, trade talks between the U.S. and China have been chugging along, with an aim to reach an agreement to end the tariff dispute before the 90-day truce agreed to by President Trump and China’s Xi Jinping is set to expire.
It appears that a lasting truce may be in sight, and China may be going on a historic shopping spree.
China has offered a six-year boost in imports during its ongoing talks with the U.S., officials familiar with the matter told CNBC.
Chinese officials made the offer during negotiations in Beijing earlier in January, Bloomberg News reported. China would increase its annual import of U.S. goods by a combined value of over $1 trillion, the officials told Bloomberg, which was first to report on the import boost offer.
China pegged its proposal to buy more U.S. goods through 2024 to President Donald Trump’s hopes of being re-elected in 2020, the sources told CNBC.
American officials are now reportedly considering lifting tariffs on Chinese imports to incentivize a better trade deal.
Last year, the Trump administration announced duties on $200 billion worth of Chinese goods and threatened additional tariffs if Beijing responded. Tensions have simmered down since December when the leaders of both countries met face-to-face on the sidelines of the G20 summit in Buenos Aires, Argentina.
Last week marked the first face-to-face meetings between Chinese and American trade delegates since the G20 summit. The meetings, which went a day longer than planned, resulted in China agreeing to purchase more U.S. farm and agricultural commodities. Chinese officials have also agreed to grant wider access to mainland markets to U.S. firms.
In addition to the buying binge, American officials are pushing for regular reviews of China’s progress on pledged trade reforms as a condition of a formal trade deal.
A continuing threat of tariffs hanging over commerce between the world’s two largest economies would mean a deal would not end the risk of investing in businesses or assets that have been impacted by the trade war.
“The threat of tariffs is not going away, even if there is a deal,” said one of three sources briefed on the talks who spoke with Reuters on condition of anonymity.
Chinese negotiators were not keen on the idea of regular compliance checks, the source said, but the US proposal “didn’t derail negotiations”.
I bet they weren’t “keen on the idea of regular compliance checks”! However, the Chinese do appear to be far more reasonable during negotiations than Nancy Pelosi and Chuck Schumer.
As a bonus, stock portfolios are seeing gains.
The stock market closed higher Friday, extending its winning streak to a fourth session, on media reports that stoked hopes for progress in trade talks between the U.S. and China. Optimism over a potential bilateral deal helped to offset worries about the prolonged partial government shutdown and mixed corporate results.
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Comments
So when are the Chinese going to pay back royalties to Juanita Donica and Dianne Syme, the inventors of Icicle Christmas Lights. A Stolen Idea:The Story of Icicle Lights
Negotiations….sometimes you have to be difficult….
How much did they pay for Congress ?
Remember, they are only rented, not bought….
Correct… Let me rephrase…
How much did they pay for the bureaucracy?
How much did they pay for the Clintons?
This is exactly what I was expecting with Trump: an understanding of what factors are most important in our various relations with foreign countries and with businessmen as well.
As Trump noted, sending Caroline Kennedy to Japan as our ambassador was dumb. Not saying she is, just that she lacks business acumen.
I am sure the Japanese were thrilled to get Caroline Kennedy as an ambassador. After all, they like celebrities. But they were probably confused and disappointed because she did not come with a few astute aides to give her the appearance of business acumen.
The Obama administration was so dumb, it didn’t know about the uses of accountants and aides to help their figureheads get things done.
Valerie,
The Obama admin wasnt dumb. The appointment was a reflection of their priorities being that she was a show appointment and nothing more. Just likevtte Obama admin, she had no substance.
China is bending because their economy is very precarious as is Xi’s hold on power. Centralized economies don’t have an “invisible hand” to turn to, no “green shoots” signaling that free enterprise liked the tax cuts and de-regulations. It’s a cadre economy based on old-time mercantilism, captive slave colonies rather than the technological innovation found in free capitalism economies
https://www.zerohedge.com/news/2019-01-21/blain-china-juggling-half-dozen-flaming-hand-grenades-while-walking-high-wire
There is also the looming threat of the Trump admin completely banning the two largest Chinese telecom equipment companies Huawei and ZTE Corp, from the US market. That means importing their products AND any products that contain their components.
https://nypost.com/2018/12/27/trump-wants-to-ban-us-companies-from-using-chinese-telecom-equipment/
This would put pretty much put those companies out of business and cripple China’s economy.
Xi is in a very precarious spot vis-a-vis the communist committee that actually runs things. Those commie tanks could roll into Tiananmen Square as soon as Xi loses their support. That day may not be far off. Xi right the ship and that requires cutting a deal with the US. As soon as China’s economy starts collapsing, Xi is gone.
https://nypost.com/2018/12/27/trump-wants-to-ban-us-companies-from-using-chinese-telecom-equipment/
Trump has a winning hand and is appears to be playing it well. As much as the Deep State and NeverTrumpers hate him now, just wait until he succeeds in the China trade agreement negotiations. How many times can heads explode?
Trump is really producing, all in all, I very very pleased.