US, Beijing reach ‘common understanding’ on trade, China says

Top negotiators from both countries agree to maintain communications on the ‘phase-one’ deal, China says.

U.S. Treasury Secretary Steve Mnuchin greets China''s Vice Premier Liu He
China said its Vice Premier Liu He, far left, spoke to US Treasury Secretary Steven Mnuchin, far right, and US Trade Representative Robert Lighthizer in a phone call on Tuesday [File: Yuri Gripas/Reuters]

Top trade negotiators from China and the United States held a phone call on Tuesday morning, China’s Commerce Ministry said, adding that they reached a “common understanding” as the two sides try to hammer out a preliminary deal in a trade war that has dragged on for 16 months.

Chinese Vice Premier Liu He spoke with US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin. They discussed issues related to a “phase-one” deal and agreed to maintain communication on remaining issues, the ministry said.

They also discussed “core issues of concern” and reached “a common understanding on resolving relevant problems,” it said.

Japan’s Nikkei share index touched a 13-and-a-half-month high on the progress of the trade talks, as investors snapped up shares in electronics and semiconductor-related companies.

Wall Street’s three major indexes had earlier closed at record highs on Monday on hopes that the US and China were closer to a tariff truce.

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.

China wants US President Donald Trump to eliminate the 15 percent tariffs on about $125bn worth of Chinese goods imposed on September 1, as well as provide some relief from the 25 percent tariffs imposed on an earlier, $250bn list of industrial and consumer goods.

Tariffs on $156bn Chinese imports are due to come into effect on December 15.

Washington and Beijing officials, politicians and trade experts say a more ambitious “phase-two” trade deal looks less likely.

Tuesday’s call took place amid heightened tensions on various fronts between Beijing and Washington, with China saying on Tuesday that it had summoned US Ambassador Terry Branstad to protest against the passage in the US Congress of the Hong Kong Human Rights and Democracy Act.

US President Donald Trump has yet to sign the two bills intended to support pro-democracy protesters in Hong Kong and warn China about its human rights record.

China’s foreign ministry said the legislation amounted to interference in a Chinese internal matter.

Commerce Minister Zhong Shan, central bank governor Yi Gang and Ning Jizhe, vice head of China’s state planning organisation, also participated in the phone call.

Source: Reuters