USA and China near deal that would suspend planned tariffs

Cheryl Sanders
December 13, 2019

The deal, which has already been approved by President Donald Trump, will stop tariffs of 15 percent set to kick in on Sunday on $160 billion in Chinese-made goods, including toys, electronics, phones and clothes, Reuters said.

Trump has rejected deals with China before.

The Dow Jones index closed 221 points higher (+0.8 per cent) at 28,132.

The agreement would also reduce existing tariff rates in exchange for Chinese purchases of U.S. farm goods. Trade experts call that a "snapback" provision, though the president didn't use that term, Mr. Pillsbury said.

The White House had no comment on any tariff reduction offers.

Democratic lawmakers in a letter on Thursday told the president this point in the negotiations marks a "critical juncture" for the United States to secure concessions "on major structural challenges that will only become more hard to address".

Robert Lighthizer, the USA trade representative leading the negotiations with China, is in a camp who sees progress in talks and wants them to continue without further escalation, according to people familiar with the discussions.

U.S. President Donald Trump posted on Twitter Thursday that the U.S. was "very close" to nailing down a deal.

Stock markets are likely to fall sharply if two months of talks aimed at producing an interim trade deal collapse and Washington goes ahead with a fresh tranche of tariffs this weekend. "They all want to buy the sexy semi-conductors, technology, or anything to do with U.S".

Stocks soared in the afternoon after Bloomberg first reported on the in-principle deal, with the S&P 500 and Nasdaq closing at record highs.

A phase-one pact is expected to be built largely around a significant increase in Chinese agricultural purchases in exchange for the USA delaying a new round of tariffs scheduled to take effect December 15 and a reduction in existing levies. Imports previous year totaled more than $500 billion.

The final percentage of tariff rate reduction the US might offer Beijing has not been set, and will be proportional to the amount of the Section 301 trade war issues addressed by Chinese concessions, one source said.

Trump, speaking at a White House event on paid parental leave later on Thursday morning, acknowledged the impact.

The 17-month-long trade war was initiated last July when United States levied tariffs on Chinese goods in an attempt to compel the communist regime to address a range of unfair trade practices, including theft of USA intellectual property, forced technology transfer, subsidies for domestic industries, and currency manipulation.

China has insisted on a rollback of all tariffs as being an integral part of any trade agreement with the United States.

Beijing has said previously it would retaliate if the United States escalates the trade dispute. Tariffs on the first batch kicked in on September 1, hitting USA goods including soybeans, pork, beef, chemicals and crude oil.

In August, China said it would impose 5% and 10% in additional tariffs on $75 billion of USA goods in two batches.

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