US-CHINA: China Considering US Investment Package To Ease Curbs - Bloomberg

MNI London: Bloomberg reporting that, “China is pushing the Trump administration to roll back national-security restrictions on Chinese deals in the US, dangling the prospect of a massive investment package as part of a proposal that would upend a decade of policy.”

• According to Bloomberg sources, “The demands from President Xi Jinping’s negotiators also include lowering tariffs on imported inputs from the world’s No. 2 economy used by any Chinese factories built in the US as a result.” Bloomberg notes, “The Chinese floated a figure of $1 trillion earlier this year... but the size of the potential investment being discussed now is unclear.”
• The report adds, “Any agreement to greenlight significant Chinese investment would involve a sharp reversal of policies enacted by both Washington and Beijing over the past decade…”
• Treasury Secretary Scott Bessent told CNBC yesterday that he expects a “pretty big breakthrough” during a fifth round of trade talks with his Chinese counterpart, Vice Premier He Lifeng, in South Korea later this month.
• While tariffs and export controls have been the primary theme of the previous four rounds of talks, China’s exit from the US soybean export market is emerging as a key bargaining chip for China. Agricultural exports are a salient political issue for Republicans, with Trump reportedly considering tapping tariff revenue for a USD$10 billion farmer bailout.
• Bessent said, “It’s unfortunate the Chinese leadership has decided to use the American farmers, soybean farmers, in particular, as a hostage or pawn in the trade negotiations.”