The U.S. and China have mutually agreed to roll back tariffs as part of a “phase one” trade accord lifted financial markets. One U.S. official concurred that the two sides are planning to roll back tariffs as part of an initial trade pact—which would indicate that reports earlier this week that such a rollback was under consideration had progressed.
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 worth of Chinese imports, including cell phones, laptop computers and toys. If confirmed by the US, such an understanding could help provide a road map to a deal de-escalating the trade war that’s cast a shadow over the world economy.
Pressure is mounting by the international community for the United States and China to work out their differences. The International Monetary Fund last week forecast that fallout from the U.S.-China trade war and trade disputes across the world will slow global growth in 2019 to 3.0%, the slowest pace in a decade.
Stocks rallied on Thursday, with Hong Kong’s Hang Seng Index climbing 0.6 percent. European shares and US stock futures also rose and the yuan strengthened to a three-month high. White House spokeswoman Stephanie Grisham told Fox News Channel the United States is “very, very optimistic” about completing a deal that would defuse a 16-month trade war between the world’s two largest economies.”
The Finishing Touches on the Phase One–
- Chinese purchases of American farm goods
- Rules to deter currency manipulation
- Provisions to protect intellectual property
- Open up Chinese industries to U.S. firms
Tariff cancellation was an important condition for any agreement, Chinese Commerce Ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other’s goods to reach the phase one pact. According to Bloomberg, Trump administration officials in recent days have expressed optimism that phase one of a comprehensive trade deal might come together this month, helping boost equity markets to records this week.
In terms of the content of the deal, differences still remain on the scale of American farm products China will purchase. Structural issues such as industrial subsidies and forced technology transfers are expected to be set aside until the phase-two discussions or later.