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Report: China looks to boost purchase of US coal to cut deficit, ease trade war

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Report: China looks to boost purchase of US coal to cut deficit, ease trade war

China is mulling over a plan to purchase more coal from the U.S. in a bid to slash its $375 billion merchandise trade deficit and ease the ongoing trade war between the two nations, Bloomberg News reported, citing people with knowledge of the matter.

Chinese officials are looking to boost purchases from West Virginia in particular, the report said, noting that it was yet unclear if there are any plans to purchase the fossil fuel from other states. All of the state’s coal is bituminous with varying sulfur content, and about 75% is shipped out to other states and countries, the report said.

According to data from the Energy Information Administration, the U.S. exported about 3.2 million tons of coal to China in 2017, or about $395 million, based on an average price of $122 per ton, said Andrew Cosgrove, Bloomberg's analyst. About 90% of the coal shipped was metallurgical, which is used to make steel.

While President Donald Trump has since moved away from the economic truce reached between Beijing’s special envoy and the White House in Washington on May 19, U.S. Commerce Secretary Wilbur Ross plans to head back to Beijing early June to continue talks, Bloomberg News reported, adding that China has already said it will slash import duty on passenger cars.

There is some speculation that more tariff reductions are on the way, the report said.