Trade between the two biggest economies of the world has been an issue of a lot of political discussions. The US has a huge trade deficit with China. It imported $337 billion more worth of products from China than were exported. This has been seen as a major problem by many in the US, which could have stoked incumbent administration’s response. President’s top economic adviser, Larry Kudlow, explicitly stated that China had agreed to reduce the deficit by $200 billion. Although that statement was later retracted, it showed that demanding from China to increase its imports of American goods was a part of the negotiations. “We made very meaningful progress and we agreed on a framework. The framework includes their agreement to substantially reduce the trade deficit by increasing their purchases of goods,” – Treasury Secretary, Steven Mnuchin said in a statement.
Some experts see the move by US officials to set aside import tariffs as a mistake and point out the loss of leverage in future discussions. Yet, the administration has said several times that tariffs are still considered as an option and will be used in negotiations. US Trade Representative, Robert Lighthizer commented – “As this process continues, the United States may use all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations”.