China Said To Offer US Concessions To Eliminate Trade Imbalance

China has extended an olive branch to intransigent U.S. leaders in order to reopen trade between the two major economies, according to Bloomberg. 

What Happened

In an effort to restore its economic relationship with the U.S., China offered to ramp imports from the region by more than $1 trillion over the next six years, according to a Friday Bloomberg report. The rate would slowly reduce its trade surplus and completely eliminate the imbalance by 2024.

The S&P 500 and Dow Jones Industrial Average spiked more than 1 percent on the news.

Why It’s Important

The conciliatory offer, if true, is meant to appease U.S. officials aggravated by what they perceive to be an unfair trade arrangement. Last year, the U.S. initiated a trade war with China that saw multiple rounds of tariffs diminish Chinese imports and inspire retaliatory tariffs on its own goods.

The tension depressed both markets. 

Early negotiations to eliminate the tariffs failed, but it seems both sides are increasingly willing to compromise. Thursday reports revealed the U.S. is considering an easing of tariffs in an effort to incentivize long term Chinese concessions. U.S. indices popped on the news.

What’s Next

Whether U.S. officials will accept China’s timeline for balance restoration — and whether the offer was indeed put forth — is yet to be confirmed.

Additionally, the U.S.’s own tariff plans remain contingent on support from Trade Representative Robert Lighthizer, who has so far resisted reductions proposed by Treasury Secretary Steve Mnuchin.

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