U.S. Administration aiming to slash China trade surplus by $100 billion

It is to be seen how the Trump Administration will go about achieving its goal of balancing trade between the two economies. Although a spokeswoman clarified on Trump’s tweet to even out this trade surplus, a lot more clarity will be required before the imposition of tariffs which could potentially start a trade war.

Clarifying on a tweet from U.S. President Donald Trump, a spokeswoman for the White House said, the U.S. Administration is pushing China to curb its trade surplus by at least $100 billion.

In 2017, the U.S. reported a record trade deficit with China to the tune of $375 billion while China reported its 2017 U.S. trade surplus at $276 billion.

However, the White House spokeswoman declined to detail how the U.S. administration would press China to slash its surplus and boost the purchase of U.S. products, including aircrafts and soybeans; or whether it would press China to significantly change its industrial policies, or further reduce its production capacity of steel and aluminum.

As yet, it is unclear as to whether this reduction of $100 billion in U.S.-China trade surplus would address U.S. complaints of China’s coercive policies that effectively require U.S. firms to transfer their tech know-how to their Chinese joint venture partners in order to gain access to its market.

This issue is a key element in the U.S. probe under Section 301 of the Trade Act of 1974, which trade experts say might not be applicable to China since the alleged Chinese violations of U.S. intellectual property may fall outside of WTO rules.

“If the U.S. wants to reduce its trade deficit, it has to make Americans more hard-working and conduct reforms in accordance with international market demand, instead of asking the rest of the world to change,” reads an editorial in Global Times, a Chinese state-run tabloid.

“Once a trade war starts, capable countries won’t bow to the U.S. China has tried hard to avoid a trade war, but if one breaks out, appeasement is not an option.”


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