China: $200 bn offer to close trade war

China has offered President Donald Trump a $200 billion reduction in its annual trade surplus with the U.S. by increasing imports of American products and other steps, said a Trump administration official.

The offer of increased purchases of US goods and other measures, reported by Reuters and Bloomberg, citing anonymous sources, came as US President Donald Trump took a harsher tone in discussing China and its business practices.

Trump on Thursday met with Vice-Premier Liu He, China’s top economic aide to President Xi Jinping, at the White House ahead of a second round of trade negotiations between the two nations. The official didn’t describe the U.S. response.

The surprise meeting was not open to media, and no transcripts were available. But Trump posted a photo of the two men in the Oval Office on his Twitter account. He said they were “talking trade”.

The United States officials conveyed the President’s clear goal for a fair trading relationship with China,” the White House said in a statement late Thursday. “The United States officials and the Chinese delegation also participated in a meeting with President Donald J. Trump at the White House. The two sides agreed to continue the discussions on Friday.”

The friendly-looking handshake with Liu was a stark contrast to the negative tone Trump took earlier in the day, when he said “we have been ripped off by China” on trade, and denied that his recent comments about helping resolve US sanctions on Chinese telecommunications giant ZTE meant that his administration was going soft on Beijing.

A $200 billion reduction in the U.S. trade gap with China by 2020 was on a list of demands the Trump administration made earlier this month as Treasury Secretary Steven Mnuchin led a delegation to Beijing. The U.S. merchandise trade deficit with China hit a record $375 billion last year.

The U.S. had earlier made additional demands, including a halt to subsidies and other government support for the Made in China 2025 plan that targets strategic industries from robotics to new-energy vehicles. China had made its own demands, including giving equal treatment to its investment, and warned U.S. companies may be excluded from measures to open its economy.

The U.S. and China were expected to exchange new trade proposals during the Washington talks, Trump economic adviser Larry Kudlow said earlier Thursday. Mnuchin is leading the talks with Liu, along with Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer, according to the White House.