China working on offering Trump new trade deal
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The news: Beijing is preparing an initial trade negotiation proposal with the Trump administration following Donald Trump’s imposition of 10% tariffs on Chinese imports into the US, The Wall Street Journal reported.
The offer seeks to avoid greater tariff increases and technology restrictions from the Trump administration, the journal said.
The numbers: The offer focuses on reviving a trade agreement signed in 2020 with the first Trump administration that was never implemented. It required China to increase purchases of US goods by USD200 billion over a two-year period.
China ultimately bought only 58% of the promised goods. US exports to China would have needed to grow 33% annually to meet the targets, the paper noted.
According to the sources, the plan could involve offering more investments in the US—in sectors such as EV batteries—a commitment not to devalue the yuan, and reducing fentanyl precursor exports.
Included in the reported concessions Beijing is willing to make is treating TikTok as a commercial matter, allowing ByteDance to negotiate with US investors.
The context: Trump is reportedly open to talks and has signalled that by only hitting China with 10% tariffs starting Tuesday—as opposed to the 25% imposed on Canada and Mexico, and the threatened 60% tariff increases on Chinese goods.
It comes as Trump has also ordered a review of US-China economic relations, due by early April, which could result in recommendations for higher tariffs and expanded restrictions on Chinese goods and technology, amid bipartisan support for a tougher stance on Beijing.
Trade talks centred on Phase One are likely to expose divisions within the Trump administration, The Wall Street Journal noted, particularly after the unfulfilled 2020 pledge for Beijing was considered nearly impossible to fulfil when it was signed.
Some advisers, such as Treasury Secretary Scott Bessent, have previously voiced support for Phase One, while others are expected to push for broader measures against China’s tech industry.
The source: The Wall Street Journal
