China-US trade deal nearly sealed, but tariff rollback uncertain

China and the United States are “moving closer to agreeing” on a phase-one trade deal, the Global Times tabloid run by the ruling Communist Party’s official People’s Daily newspaper group, reported on Sunday.

But the report noted that Washington and Beijing had not agreed on specifics or the size of the rollbacks of tariffs on Chinese goods.

China’s insistence that the administration of US President Donald Trump roll back tariffs has been a major sticking point in resolving the trade war between the world’s two largest economies.

Trump said on November 8 that he had not yet agreed to do so, and he is expected to have the last word in the US on the terms of any such interim deal.

Nonetheless, the two countries are “very close” to a first-level agreement, the Global Times said on its Twitter feed, citing experts close to the Chinese government. But Beijing “remains committed to continuing talks for a phase two and even a phase three deal”, the tweet said.

However, that information was not included in a report on the Global Times website, which was much more cautious about the future of a deal.

“The two sides have basically reached broad consensus for the phase one agreement,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who is close to the trade talks, told the Global Times.

Last week, the Chinese government invited US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for face-to-face talks, the Wall Street Journal reported. Neither the USTR’s office nor Treasury responded to a request for comment from the Reuters news agency.

Completion of a phase one deal had been expected in November, but trade experts and people close to the White House said last week it could slide into the new year, as Beijing presses for more extensive tariff rollbacks and Washington counters with its own demands.

Meanwhile, Washington and Beijing officials, legislators, and trade experts say the ambitious “phase-two” trade deal looks less and less likely.

Chinese foreign ministry spokesman Geng Shuang declined to comment specifically on the Global Times report during a daily press briefing but reiterated that Beijing would like Washington to work to resolve the outstanding issues.

The outlook was further complicated last week when the US Congress approved legislation to back protesters in Hong Kong, although Sunday’s completion – without major disruptions – of district council elections in the Chinese-controlled territory could help.

On Saturday, US National Security Adviser Robert O’Brien said an initial trade deal with China was still possible by the end of the year. He said it would be “a good sign” if the Hong Kong elections took place without violence.