China, U.S. Agree to Phased Tariff Rollback as Deal Progresses

Andrew Cummings
November 8, 2019

An interim US-China trade deal is widely expected to include a US pledge to scrap tariffs scheduled for December 15 on about $156 billion (£121 billion) worth of Chinese imports, including cell phones, laptop computers and toys.

"In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement", Gao said.

"The trade war started with tariffs, and should end with the cancellation of tariffs", Gao told a regular news briefing.

"The question right now is what the two sides have actually agreed on - the market's focus has shifted to how the United States may react to China's tariff remarks tonight or in coming days", Oversea-Chinese Banking Corp Ltd (華僑銀行) economist Tommy Xie (謝東明) said.

The statements come amid rising hopes that the two countries will sign a pact that declares an end to a trade fight that has disrupted the global economy.

"Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations".

Last month, the US leader met with Chinese Vice Premier Liu He, leading the two countries to agree to a "phase one" deal that includes China's purchase of $40 billion to $50 billion worth of American agricultural products, as well as guidelines on intellectual property.

U.S. trade representative, Robert Lighthizer, is one of several officials who have argued that the duties on the $250bn of goods are a way of making sure China lives up to its commitments and should be in place for the long term. Gao declined to say when and where such a meeting could be.

President Donald Trump agreed to postpone a planned tariff hike while lower-level officials hammered out details.

In terms of the content of the deal, differences still remain on the scale of American farm products China will purchase.

A Chinese government spokesman said the economic superpowers would remove tariffs - taxes imposed on imports - - in phases "as progress is made on the agreement".

There had been no indication whether Mr. Trump might agree, which raised the possibility of another breakdown in negotiations.

Mr. Trump and Xi were due to meet at this month's gathering of Asia-Pacific leaders in Chile but that event was canceled due to protests there.

Reuters reported earlier that the signing might be delayed and likely wouldn't occur in the U.S.

This marks a departure from the White House's prior plans to hold the summit on USA soil.

Analysts say the phase one deal will fail to adequately address these issues, focusing largely on Chinese purchases of US farm goods and intellectual property protections related to copyright and trademark issues. He added that rolling back earlier tariffs "goes against the grain" of the original October agreement.

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