Overnight, experts and pundits were stumped by the biggest geopolitical news from Thursday: how could China possibly – or feasibly – agree to a $200 billion cut in the US-China trade deficit, even if merely to placate President Trump.
And so, the mystery of just how China would shrink its $200 billion trade deficit with the US died on Friday morning, when China gave the answer: it wouldn't, after Beijing denied it had offered the deficit-cutting package, just hours after it dropped an anti-dumping probe into US sorghum imports in a conciliatory gesture as top officials meet in Washington.
Commentary posted in an article on WeChat accounts run by Xinhua News Agency and People's Daily overseas edition was less restrained, and said that the offer to cut China's trade surplus with the US is “nonexistent” and that reports that China accepted the US demand to narrow the trade gap are “purely a misreading.” The article said that China will “never negotiate under the conditions set by the US” and added that “two sides made progress in areas such as the US allowing more exports of technology products including semiconductors, as well as lifting restrictions on energy exports” but stressed that “China won't make unilateral concessions.” The article also underscored that just hours before President Donald Trump met Vice Premier Liu He, the two sides were at loggerheads on key issues, and concluded that negotiations are ongoing and called on China to “fight for the best, and prepare for the worst.” It added that “tomorrow is a crucial day” without elaborating.
As a reminder, a $200 billion reduction in the trade gap with China by 2020 was on a list of demands the Trump administration made earlier this month as Treasury Secretary Steven Mnuchin led a delegation to Beijing.
The United States shipped 4.76 million tonnes of sorghum to China in 2017, worth about $1.1 billion, accounting for the bulk of Chinese imports of the grain used in animal feed and Chinese liquor.