The Trump administration is “putting the trade war [with China] on hold” after the two sides agreed on a framework for progress on trade issues during talks held May 17-18 in Washington, D.C., according to Treasury Secretary Steve Mnuchin. Specifically, the White House will suspend plans to levy an additional 25 percent tariff on $50 billion worth of imports from China in response to a Section 301 investigation concluding that Beijing is coercing U.S. companies into transferring their technology and intellectual property to Chinese enterprises. Those tariffs would have affected more than 1,300 products and could have been imposed as early as May 23.
According to a joint statement, China agreed to “significantly increase purchases of United States goods and services” to help reduce its trade surplus in goods with the U.S., which has been a prime focus for President Trump. Administration officials had previously pressed China to reduce this surplus by $200 billion by the end of 2020, but the statement did not refer to any specific figures.
Instead, the statement indicated that there was mutual agreement on securing “meaningful increases” in U.S. agriculture and energy exports to China, with a U.S. team slated to visit China to work out the details. However, the two sides were only able to agree on the need to “create favorable conditions to increase trade” in manufactured goods and services, with no indication of how that will be pursued.
On other long-standing trade irritants, the statement said the two sides agreed to (a) strengthen cooperation on intellectual property protections, with China pledging to advance relevant amendments to its laws and regulations in this area, and (b) encourage two-way investment and strive to create a fair, level playing field for competition.