US, China agree to reduce $370B trade deficit

National Economic Council Director Larry Kudlow discusses the ongoing trade talks between the U.S. and China.

The United States and China agreed to take steps to significantly reduce the $370 billion trade deficit between the two economic powerhouses by having Beijing purchase more goods, according to a joint statement released by the two nations on Saturday.

“There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China,” the statement read. “To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services.”

According to the White House, the U.S. will increase its agriculture and energy exports to China and will send a team of negotiators to Beijing to work out the details. It was unclear how much the deficit would be reduced by.

President Trump has been insistent about reducing the trade deficit -- which the White House has blamed for the loss of millions of U.S. jobs -- between the two countries. But when U.S. officials met with officials in Beijing last week, no deal was reached in large part because China refused a demand to cut the trade deficit by $200 billion within the next two years.

The president met with China’s Vice Premier Liu He at the White House on Tuesday afternoon, according to Trump’s chief economic adviser Larry Kudlow, who said there was “great interest” in further the negotiations.

The delegations, which included Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer, also discussed expanding trade in manufactured goods and services, as well as improving trade conditions in these areas.

Kudlow, a self-avowed free trade advocate, hinted earlier this week that conversations between the U.S. and China were moving in a direction that would eliminate trading barriers, like tariffs.

“Both sides agreed to encourage two-way investment and to strive to create a fair, level playing field for competition,” the statement read.