China denies offering a US$200b package to slash US trade gap

[BEIJING] China denied on Friday that it had offered a package to slash the US trade deficit by up to US$200 billion, hours after it dropped an anti-dumping probe into US sorghum imports in a conciliatory gesture as top negotiators meet in Washington.

US officials had said on Thursday that China was proposing trade concessions and increased purchases of American goods aimed at cutting the US trade deficit with China by up to US$200 billion a year.

"This rumour is not true. This I can confirm to you," Chinese foreign ministry spokesman Lu Kang told a regular news briefing.

"As I understand, the relevant consultations are ongoing and they are constructive," he said, adding that he could not elaborate on the specifics of the negotiations.

Chinese Vice Premier Liu He is in Washington this week for talks with US officials led by US Treasury Secretary Steven Mnuchin aimed at heading off a trade war between the world's two biggest economies.

Getting to a US$200 billion reduction of the US-China trade deficit on a sustainable basis would require a massive change in the composition of commerce between the two, and the news from the unidentified US officials in Washington had been met with scepticism from economists.

"That's an enormous number and it suggests that there could be some impressively ambitious accounting," said Scott Mulhauser, a former chief of staff at the US Embassy in Beijing and US Export-Import Bank official who now advises companies on trade.

The US goods deficit was $375 billion last year.

One US source said earlier that U.S. aircraft maker Boeing Co would be a major beneficiary of the Chinese offer to narrow the trade gap if President Donald Trump were to accept it. Boeing is the largest US exporter and already sells about a quarter of its commercial aircraft to Chinese customers.

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

A White House statement described the meetings as part of "ongoing trade discussions" and said Mr Trump met the Chinese delegation led by Mr Liu and the US team led by Mr Mnuchin.

"The United States officials conveyed the president's clear goal for a fair trading relationship with China," the White House said.

REUTERS