US pressing China to cut trade surplus by $131 billion
He meant US$100 billion, not US$1 billion, says White House, after US President presses China on trade gap
WASHINGTON The Trump administration is pressing China to cut its trade surplus with the US by US$100 billion (S$131 billion), a White House spokesman said on Wednesday, clarifying a tweet last week from President Donald Trump.
Mr Trump tweeted that China had been asked to develop a plan to reduce its trade imbalance with the US by US$1 billion, but the spokesman said he had meant to say US$100 billion.
The US had a record US$375 billion trade deficit with China last year, which made up two-thirds of its global US$566 billion trade gap last year, according to US Census Bureau data.
China reported its 2017 US trade surplus as US$276 billion, also about two-thirds of its reported global surplus of US$422.5 billion.
The spokesman declined to provide details about how the administration would like China to accomplish the surplus-cutting goal - whether increased purchases of US products such as soybeans or aircraft would suffice, or whether it wants China to make changes to its industrial policies, cut subsidies to state-owned enterprises or further reduce steel and aluminum capacity.
The request comes as the Trump administration is said to be preparing tariffs on imports of up to US$60 billion worth of Chinese information technology, telecoms and consumer products as part of an investigation into China's intellectual property practices.
It is also unclear if the requested US$100 billion reduction would address complaints about China's investment policies that effectively require US firms to transfer technology to Chinese joint venture partners in order to gain market access.
Trade experts have said that tariffs imposed as a result of the China intellectual property probe may fall outside of World Trade Organisation rules.
In an editorial, widely-read Chinese state-run tabloid Global Times said the US was trying to play the victim.
"If the US 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," it wrote.
"Once a trade war starts, capable countries won't bow to the US. China has tried hard to avoid a trade war, but if one breaks out, appeasement is not an option."
But Washington showed on Wednesday that it has not abandoned the global trade body, launching a WTO legal challenge to India's export subsidies for domestic companies, including producers of steel, chemicals, pharmaceuticals, textiles and IT products.
US Trade Representative Robert Lighthizer said India had failed to remove the subsidies as required by WTO rules after the country reached certain economic benchmarks.
The US is expected to invoke a national security exception to WTO rules in imposing import tariffs of 25 per cent on steel and 10 per cent on aluminum announced by Mr Trump last week. - REUTERS