US and China appear close to deal to roll back tariffs

The United States and China appear close to a deal that would roll back US tariffs on at least $200bn worth of Chinese goods as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on American goods.

US President Donald Trump and Chinese President Xi Jinping could seal a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday.

In an eight-month trade war, the US has imposed punitive tariffs on $250bn worth of imports from China, while Beijing has hit back with tariffs on $110bn worth of US goods, including soybeans and other commodities. The actions have roiled financial markets, disrupted manufacturing supply chains, and reduced US farm exports.

Trump administration officials have said they expect the two presidents to “close” a deal at a summit in coming weeks at Trump’s Mar-a-Lago estate in Florida.

‘Differences and disputes’

The “substantive progress” China and the US have made in their trade talks has been “well-received” in both countries and around the world, a senior Chinese official said on Monday, maintaining Beijing’s previous upbeat assessment of discussions.

“History shows cooperation is the best choice for the world’s two largest economies,” Zhang Yesui, a former Chinese ambassador in Washington and now spokesman for China’s legislature, told a news briefing.

“Economic and trade ties between China and the United States are mutually beneficial, win-win by the nature, and we hope that both sides can continue to step up consultations, to reach a mutually beneficial, win-win agreement.

He said international disputes were not uncommon and this one was no different.

“It’s totally normal to have differences and disputes, but this does not inevitably lead to antagonism or confrontation,” he said.

It is in neither country’s interests to clash or have a confrontation, Zhang added.

“Using the old thinking of the Cold War to deal with new problems in the context of globalisation definitely won’t get you anywhere.”

Done deal?

A source briefed on the talks told Reuters news agency that no dates for a summit had been determined, but Beijing had reserved a 10-day window from around March 20 for a possible meeting.

Many details still needed to be worked out, including the terms of an enforcement mechanism to ensure that Beijing follows through on pledges to make changes to policies to better protect US intellectual property, end forced technology transfers and curb industrial subsidies.

The Wall Street Journal said China would lower tariffs on US-made goods including agricultural products, chemicals and cars in exchange for sanctions relief from Washington in the pending agreement, citing people briefed on the matter on both sides.

The newspaper’s sources cautioned that hurdles remain, and each side faces possible resistance at home that the terms are too favourable to the other side.

Last week, Trump said the US could walk away from a trade deal with China if it were not good enough, even as his economic advisers touted “fantastic” progress towards an agreement.

Trump a week ago delayed a tariff increase on $200bn in Chinese goods that was previously scheduled to take place on Saturday, citing progress in the talks.