WASHINGTON: White House economic adviser Larry Kudlow on Tuesday called it a good sign that top U.S. officials would be traveling to China to discuss reviving stalled trade talks, and said he expected Beijing to start buying U.S. agriculture products soon.
In recent phone calls with Chinese negotiators, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had emphasized the need for Beijing to make good on its pledge to buy more U.S. agricultural products.
"As I read it, it looks like there will be a trip to China and we expect, we hope strongly that China will very soon start buying agriculture products, No. 1 as part of an overall deal and No. 2 as a goodwill gesture," Kudlow told reporters.
Lighthizer and senior U.S. officials will travel to Shanghai on Monday, Bloomberg reported, citing unnamed sources. Lighthizer's office did not immediately respond to a request for comment on the report.
China and the United States, the world's two largest economies, are trying to kick-start stalled negotiations aimed at ending a yearlong trade war marked by tit-for-tat tariffs.
U.S. President Donald Trump agreed during a meeting with Chinese President Xi Jinping last month to hold off on imposing tariffs on the remaining US$300 billion in Chinese imports while talks resumed. Kudlow said the Chinese agriculture purchases expected in return had not occurred but that could change soon.
"We haven't had a guarantee of that, but I wouldn't be surprised if we saw a lot of positive news on that coming up," Kudlow said. "I'm going to strike a note of hopefulness."
U.S. Commerce Secretary Wilbur Ross downplayed the prospect, however. Asked whether China was moving toward buying more agricultural goods, Ross told Bloomberg TV, "I'm not aware that the gate has opened to any significant degree."
Agriculture Secretary Sonny Perdue said on Tuesday the U.S. government will pay a minimum of US$15 per acre to farmers hurt by the trade war with China under a US$16-billion aid package to be unveiled before the end of the week.
U.S. farmers, a key Trump constituency, have been among the hardest hit in the trade war between the United States and China. Soybeans are the most valuable U.S. farm export, and shipments to China dropped to a 16-year low in 2018.
Tensions over trade are clearly taking a toll on the global economy, the International Monetary Fund reported on Tuesday.
The global lender lowered its forecast for global growth this year and next, warning that more U.S.-China tariffs, auto tariffs or a disorderly Brexit could further slow growth, weaken investment and disrupt supply chains. It also slashed its forecast for growth in global trade by 0.9 percentage point to 2.5 per cent in 2019.
It said escalating U.S. tariffs and weakening external demand were pressuring China's economy, which was already in the middle of a structural slowdown. China's economy was now expected to grow 6.2 per cent in 2019 and 6.0 per cent in 2020, a 0.1 percentage point drop for each year, the IMF said.