US, China Reach Agreement On Trade Imbalance

The United States and China said on Saturday they had reached consensus on measures to "substantially" reduce the US trade deficit with Beijing by "significantly" increasing its purchases of US goods, but offered few details.

The joint statement, coming at a time of high tensions over trade, followed high-level talks in Washington between delegations led by US Treasury Secretary Steven Mnuchin and China's State Council Vice Premier Liu He. The sides had met two weeks ago in Beijing.

"There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China," the statement said.

"To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services."

Last year the United States had a US$375.2 billion trade deficit with China, a source of frequent and bitter complaint by President Donald Trump.

The Secretary for Commerce Edward Yau, welcomed the statement, saying the move would help Hong Kong maintain its strong economic growth, as both China and the US are important trade partners with the SAR. He added that the government would follow up and find out whether the US will cancel a tariff imposed on aluminium imports from Hong Kong.

The statement on Saturday said some details would be worked out in further talks in Beijing. But it offered no specifics to indicate the magnitude or exact nature of the accord, and it listed no numeric targets.

The governments also agreed to avoid any trade war. Vice-Premier He said: "The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other." They also agreed to strengthen co-operation on protecting intellectual property - a long-standing source of complaint from the US side.

The two countries, their economies enormously interlinked by trade and finances, opened the delicate negotiations a few weeks ago in an attempt to resolve months of trade tensions. (AFP)