China’s announcement comes as top officials from both countries meet in the US in an effort to ease a trade war before further escalation between the world’s strongest economies. China’s announcement that it is putting an end to an investigation, which hindered a trade worth more than $1 billion last year, came after officials from the US announced China’s offer of a package to cut down the United States trade deficit by approximately $200 billion. The Commerce Ministry of China said the anti-dumping probe on imports of sorghum came about as a result of the widespread effect on consumers, and the consideration of public interest.

The announcement of China’s offer and the increased purchase of American goods came two days after the two countries talked trade in Washington, focusing on resolving tariff threats. Still, it is not clear how the total value will be determined. Most of the information presented in this article comes from reports by CNBC.

Beneficiaries of the Chinese offer

Aircraft maker Boeing would be one of the major beneficiaries of such an offer to cut down the trade deficit if the US president were to accept it.

Boeing is considered the largest exporter, with a quarter of its commercial aircraft sold to Chinese customers. Goods including sorghum, pork, nuts, wine, and fruit, might be included in the package of elimination of Chinese tariffs on $4 million worth of the United States farm products. The White House claimed that the United States officials have conveyed the US president’s objectives for the trading relationship between the two countries. Still, getting a $200 billion worth of reduction of the trade deficit will need a great change in the composition of trade between China and the US.

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The deficit of the of the United States goods was $375 billion last year. Soybeans and aircraft were the biggest United States exports to China. Last year, aircraft exports were at $16 billion, while soybeans were at $12 billion.

Sorghum dumping probe

Last year, the United States shipped over four million tons of sorghum to China for the bulk of the country’s consumption of sorghum used for livestock and Chinese liquor. In April, Beijing forced the United States sorghum exporters to put a 178.6 percent deposit on the value of the grain shipments to China after launching an investigation after Trump’s imposition of tariffs on imports of washing machines and solar panels.

Ole Houe, director at brokerage IKON Commodities, said China has taught the United States a lesson and showed its ability to hurt American exports, and now China is showing goodwill by halting the anti-dumping probe into sorghum imports. Still, the United States doesn’t have enough sorghum to export as the next crop will be harvested in August. Agreeing to a deal focused on the reduction of the trade deficit would weaken Trump’s objective of putting pressure on China to end policies that he says are misappropriating the United States technology.

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