A high-level US delegation has asked China to cut the bilateral trade deficit by $200bn by 2020, reduce tariffs and cut subsidies for emerging industries, according to a document seen by the Financial Times.
The $200bn target is double the $100bn amount that US President Donald Trump demanded in March be wiped from last year’s $337bn US deficit in goods and services. According to the document, the US aims to cut the deficit by $100bn in the year beginning June 1, and by a further $100bn between June 2019 and May 2020.
The discussion document demands that China reduce tariffs to levels no higher than those that the US imposes on the same goods.
The document also calls on China to cut subsidies linked to the country’s “Made in China 2025” industrial policy plan designed to promote development of advanced industries including electric vehicles and artificial intelligence.
It further calls for removing investment restrictions affecting US companies operating in China, including shareholding caps.
The document was sent to Chinese negotiators in advance of bilateral talks in Beijing scheduled to conclude on Friday.
The US sent a broad delegation led by Steven Mnuchin, US Treasury secretary, who was accompanied by Wilbur Ross, US commerce secretary, Robert Lighthizer, US trade representative, and White House trade adviser Peter Navarro.
The US has maintained that intellectual property theft, forced technology transfers, and joint-venture requirements affecting foreign investment in a range of Chinese industries amount to a systematic effort to erode US leadership in strategic sectors.
But executives say these moves will have a limited impact given that China’s domestic financial institutions now hold powerful incumbent positions, while global automakers cannot easily exit from existing joint ventures.
In an editorial on Friday, published before the leak of the document, the state-run China Daily newspaper wrote that recent escalation over “niggly” differences suggest “how difficult it will be for the two sides to walk away happy”.