*BEIJING: Washington and Beijing have agreed to abandon any trade war andback off from imposing tariffs on each other, Chinese state media reportedSunday.*
The announcement came after high-level talks in the US capital and followedmonths of tensions over what President Donald Trump has blasted as anunfair commercial relationship between the two economic giants.
Vice-Premier Liu He, who led Chinese negotiators in Washington said: “Thetwo sides reached a consensus, will not fight a trade war, and will stopincreasing tariffs on each other,” state-run news agency Xinhua reportedSunday.
Liu called the agreement a “necessity”, but added: “At the same time itmust be realised that unfreezing the ice cannot be done in a day, solvingthe structural problems of the economic and trade relations between the twocountries will take time.”
An earlier joint statement issued in Washington said Beijing would“significantly” increase its purchases of American goods, but offered fewdetails.
The apparent detente comes after months of increasing tensions that haveset markets on edge over fears of a damaging trade war.
Trump has repeatedly railed against his country’s trade deficit with China,describing it as a danger to US national security and threatening to imposetariffs on billions of dollars’ worth of Chinese goods.
US levies on $50 billion of Chinese imports could have come into effect asearly as next week.
The talks in Washington were between delegations led by US TreasurySecretary Steven Mnuchin and Liu, who also met Thursday with Trump. Thesides had met earlier in Beijing.
“There was a consensus on taking effective measures to substantially reducethe United States trade deficit in goods with China,” the joint statementsaid.
“To meet the growing consumption needs of the Chinese people and the needfor high-quality economic development, China will significantly increasepurchases of United States goods and services.”
*– ‘Meaningful increases’ –*
Last year, the United States had a $375.2 billion trade deficit with China,with populist politicians blaming the Asian powerhouse for the leeching ofAmerican jobs over the last few decades.
Washington reportedly had demanded the deficit be slashed by at least $200billion by 2020.
However, the joint statement held no indication that China had assented tothat target.
It said both sides had agreed on “meaningful increases” in US agricultureand energy exports. Liu said the new trade cooperation would extend tomedical care, high-tech products, and finance, according to Xinhua.
They also agreed to strengthen cooperation on protecting intellectualproperty — a long-standing source of US discontent.
The two countries, their economies enormously interlinked, opened thedelicate negotiations a few weeks ago.
Trump had threatened China with tariffs on up to $150 billion of imports,prompting Beijing to warn it would target US agricultural exports,aircraft, and even whiskey.
*– ‘Ripped off’ –*
The White House is wary of hurting largely Republican-voting farm states ordamaging the economy before legislative elections this November. But Trumpis also keen to appear tough on trade.
On Thursday, he unleashed a barrage of criticism against former USadministrations, saying they had allowed Beijing to take advantage of theUnited States.
“We have been ripped off by China. And an evacuation of wealth like nocountry has ever seen before given to another country that’s rebuilt itselfbased on a lot of the money that they’ve taken out of the United States,”he said.
“China has become very spoiled.”
The trade issue is complicated by the impending summit meeting in Singaporebetween Trump and North Korean leader Kim Jong Un, who has consulted withChinese leader Xi Jinping.
China is North Korea’s biggest trade partner, and Trump has called on itrepeatedly to press Pyongyang to rein in its nuclear and missile programs.
The joint statement made no mention of Chinese telecom giant ZTE, which hadsuspended operations after US sanctions were imposed to punish it forexporting sensitive materials to Iran and North Korea.
Trump took observers by surprise last week when he tweeted that he and Xiwere “working together” to find a way to help ZTE “get back into business,fast.”
If the US and China face further difficulties in the future, Liu said: “Wemust look at them calmly, maintain dialogue and properly handle them.” -APP/AFP