The US and China have agreed to begin bilateral trade talks, with Beijing committing to “substantially reduce” the trade deficit between the countries by boosting the amount of goods it purchases from America.
A joint statement sent from the White House announced they had reached “consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China”.
The announcement comes amid fears that President Donald Trump’s tough talk on trade could spark a trade war between two of the world''s largest economic power houses.
The development comes just one day after the US and China appeared at odds over a claim from White House Economic Adviser Larry Kudlow, who said that China had agreed to reducing its deficit with the US by $200bn.
It is not clear exactly how much China actually plans on reducing that deficit, however, and negotiators from both countries reportedly went back and forth through the night as they crafted the exact language of the joint statement, according to the Wall Street Journal.
Mr Trump has remained optimistic that a palatable agreement will be made, and has regularly boasted that his good relationship with Chinese President Xi Jinping is an asset that will help deliver that promised reduction.
“President Xi and I will always be friends, no matter what happens with our dispute on trade,” Mr Trump tweeted last month as the talks of a potential trade war swirled.
The trade deficit has grown recently, and has proved to be a difficult issue to resolve between Washington and Beijing for years. Data from the Department of Commerce shows that the imbalance reached a record high of $375 billion in 2017.
The tough stance Mr Trump has taken on the deficit with China has led to those in some areas of the American agricultural industry to express concern that a potential trade war with China could ravage their businesses, since China is a main trading partner for American agricultural exports.
The statement released Saturday described a cut in the deficit as being mutually beneficial to both countries’ interests.
“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,” the statement reads. “This will help support growth and employment in the United States.”
The statement says that the US will send a team to China to negotiate the agreement, and included American agricultural and energy exports as priorities.
Those talks could be held as soon as late next week, according to the statement.
Mr Trump set off fears of a trade war by saying he was considering tariffs on up to $150bn worth of Chinese products. That proposal was met with stiff threats from Beijing, which threatened an equal response targeting American exports like soybeans, cars, and aircraft.
The statement did not mention Chinese telecommunications manufacturer ZTE, which was hit with sanctions for violating a ban on sending products to Iran and North Korea that include parts made in the United States.
The president has said on Twitter that he has instructed the US government to consider reversing those sanctions, which were imposed last month and shut down the company’s operations.