The White House is looking at rolling out a previously agreed currency pact with China as part of an early harvest deal that could also see a tariff increase next week suspended, people familiar with the discussions said.
The currency accord, which the US said had been agreed to earlier this year before trade talks broke down, would be part of what the White House considers to be a first-phase agreement with Beijing. It would be followed by more negotiations on core issues like intellectual property and forced technology transfers, the people said.
The internal deliberations come as a team of Chinese negotiators, led by Vice Premier Liu He (劉鶴), arrived in Washington to resume trade talks with US Trade Representative Robert Lighthizer and US Secretary of the Treasury Steven Mnuchin, starting yesterday. It is the first face-to-face talks between senior officials since July.
People familiar with the Chinese delegation’s arrangements said negotiators are scheduled to leave tonight, though there could be changes depending on how the talks progress.
One person said there might also be a meeting with US President Donald Trump that day, though again it would depend on how the talks go.
During a speech in Sydney yesterday, US Secretary of Commerce Wilbur Ross — who has only played a peripheral role in negotiations — took shots at China, saying Beijing’s trade practices have “gotten worse” and the tariffs are “forcing China to pay attention.”
The window for such an agreement is closing before the US plans to raise duties to 30 percent from 25 percent on about US$250 billion of Chinese imports on Tuesday next week.
Additional duties are set to take effect on Dec. 15.
A Chinese official on Wednesday said that Beijing was still open to reaching a partial trade deal with the US that might include large purchases of US commodities, but added that success was contingent on Trump halting further tariffs.
Showing progress with a currency pact and other matters this week could serve as a reason to delay next week’s tariff hike.
Still, Trump this week said he preferred a complete trade agreement with China.
“My inclination is to get a big deal. We’ve come this far, but I think that we’ll just have to see what happens. I would much prefer a big deal and I think that’s what we’re shooting for,” he said.
A White House spokesman declined to comment.
A US Department of the Treasury spokesman did not respond to a request for comment.
The Chinese Ministry of Commerce did not immediately respond to fax about the high-level talks.
No details were made public about the US-China currency pact reached in February that Mnuchin at the time called the “strongest” ever.
According to people familiar with the currency language, the pact largely resembles what the US agreed to in a new trade agreement with Mexico and Canada, and also incorporates transparency commitments included in G20 statements.
Still, Lighthizer cautioned earlier this year that the currency agreement hinges on the overall enforcement of the trade deal.
“There’s no agreement on anything until there’s agreement on everything. But the reality is we have spent a lot of time on currency, and it’ll be enforceable,” he said in congressional testimony on Feb. 27.
Liu on Wednesday afternoon met with a small group of business executives and separately with IMF officials, people familiar with the meetings said.
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