US President Donald Trump on Thursday said that the US and China are a month from a potentially “epic” trade agreement.
However, nine months into the two nations’ trade dispute, the announcement was anti-climactic, as the White House had earlier stoked anticipation that Trump could announce a date for a summit to clinch a final deal with Chinese President Xi Jinping (習近平).
Global markets rallied, roused by the hope that an end to the skirmish was at last at hand.
Photo: AP
“We will probably know over the next four weeks. It may take two weeks after that,” Trump told reporters following a meeting with Chinese Vice Premier Liu He (劉鶴). “It’s looking very good.”
The talks were due to continue for a third day yesterday. Trump had said as far back as February that a summit could occur within a month.
Despite Trump’s rosy gloss on the talks, US Trade Representative Robert Lighthizer told reporters that major issues were left to be resolved.
US and Chinese officials have projected cautious optimism for months, but the last mile is proving to be the hardest, with the two sides reportedly tussling over whether and when Washington should remove the punishing tariffs it imposed last year on Chinese goods.
China has floated offers to make sizable purchases of US commodities and taken steps to show it would protect foreign intellectual property, but US Democrats have warned of the temptation to accept a superficial deal that does not extract profound changes to the Chinese industrial policies US officials have long denounced.
Chinese state media later carried a report that said Xi has called for the talks to conclude as soon as possible.
“I hope the two sides of the economic and trade teams will continue to resolve both sides’ issues of concern in the spirit of mutual respect, equality and mutual benefit, and finish negotiations on the China-US economic and trade agreement document as soon as possible,” Xinhua news agency quoted Liu as saying, as he conveyed a message from Xi to Trump.
A final sticking point appears to be when and how Washington would agree to lift the steep tariffs it has placed on more than US$250 billion of Chinese imports.
Last month, Trump said that the tariffs would stay in place for “a substantial period,” although whether this would apply to both tranches of goods subjected to the new duties was unclear.
US officials have demanded that any agreement have teeth and Lighthizer has said that tariffs offer crucial leverage should Beijing backslide on its commitments.
Gary Clyde Hufbauer, a former US trade official and senior fellow at the Peterson Institute for International Economics, said that lifting the tariffs too early could encourage criticism from Democrats that Lighthizer had gone soft in the negotiations.
“The White House response to this drama is to keep the tariffs and only to slowly lower the rate as the Chinese fulfill their commitments,” Hufbauer said.
“The Chinese strategy is to have them get rid of it,” he said. “My guess is that something in between will be in the compromise.”
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