The Trump administration appears to be using the threat of tariffs on steel and aluminum imports, as well as other products and goods, to put pressure on numerous countries to agree to trade concessions.  The administration is now in standoffs with Mexico, Canada, Japan and members of the European Union. However, it has been reported this week that recent talks with China appear to show concrete progress.

However, in talks in Beijing last weekend, China appeared to offer an “olive branch” to the U.S. China said it is willing to buy nearly $70 billion of U.S. products, including U.S. soybeans, corn, other agricultural goods, natural gas, crude oil, and coal in the first year of a deal if the Trump administration forgets about its threatened trade tariffs.

Chinese negotiators presented Commerce Secretary Wilbur Ross with the option on the condition that the administration dump threatened tariffs on $50 billion worth of Chinese products, to go into effect after June 15.  President Trump previously suggested that might be done if a $375 billion U.S. trade deficit with China is reduced to $200 billion annually.

“An additional $70 billion in U.S. exports to China would be considerable, a 50 percent increase in U.S. exports from 2017 levels,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.  “Ongoing negotiations are a good sign and are certainly better than a tariff war,” Bown said.  “But even that amount would not address the underlying long-run concerns the United States has with China.”

There are concerns about the U.S. ability to ramp up agricultural production to meet China’s needs.  U.S. concerns with China also include investment restrictions on foreign firms, and requirements that U.S. cloud-computing firms share their technology with Chinese firms,, industrial policy, and the protection of intellectual property.