Economy

Trump advisers consider interim China deal to delay tariffs

China has insisted throughout the negotiations that any deal would have to see a withdrawal of US tariffs.

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Some of President Donald Trump’s top trade advisers in recent days have discussed the plan in preparation for two rounds of face-to-face negotiations with Chinese officials in the US, due to take place in coming weeks.

Sunday 15, September 2019

Trump administration officials have discussed offering a limited trade agreement to China that would delay and even roll back some US tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases, reported Bloomberg.

The discussions are preliminary, and President Trump has yet to sign off on it. In response to a question about the potential for a limited agreement, the president said that he would be open to an interim deal—but would prefer a lasting one.

The proposal would freeze the conflict rather than bring a final resolution to a trade war that has cast a shadow over the global economy. US equities and Asian stock futures advanced after news of the discussions.

Additionally, the plan reflects concerns within the White House over the recent escalation in tariffs and their economic impact on the US going into an election year. Polls show the trade war is not popular with many voters and farmers are increasingly angry over depressed commodity prices.

One of the main goals is to strike a deal that would allow the administration to avoid going ahead with more tariffs in December that would hit consumer products ranging from smart-phones to toys and laptop computers. Also in play is a further delay in a tariff-rate hike due to take effect in October.

Exact details of a possible deal, like what specific commodities and how much China will buy and when still need to be worked out. But the idea is that the deal would include IP commitments that China had agreed to in negotiations in the spring before talks broke down, leading to a summer of escalation.

When those talks fell apart in May 2019 the two sides were circulating a 150-page draft agreement and White House officials have repeatedly said they were 90 per cent of the way to securing a deal.

China has insisted throughout the negotiations that any deal would have to see a withdrawal of US tariffs.

It’s not clear if special licences for Huawei Technologies will be part of the deal, citing congressional worries over national security issues related to the Chinese company.

TAGS : US-China Trade tension, US President Donald Trump, agricultural purchases, Huawei Technologie, trade tariffs

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