The administration of US President Donald Trump is suspending a tariff hike on US$250 billion in Chinese imports that was set to take effect on Tuesday, and China agreed to buy US$40 billion to US$50 billion in US farm products as the world’s two biggest economies reached a ceasefire in their 15-month trade dispute.
The two sides made some progress on the thornier issues, including China’s lax protection of foreign intellectual property, the White House said.
However, more work remains to be done on key differences in later negotiations, including US allegations that China forces foreign countries to hand over trade secrets in return for access to the Chinese market.
US and Chinese negotiators have so far reached their tentative agreement only in principle. No documents have been signed.
Trump announced the trade truce in a White House meeting with the top Chinese negotiator, Chinese Vice Premier Liu He (劉鶴). The news followed two days of talks in Washington, the 13th round of negotiations.
“It took us a long time to get here, but it’s something that’s going to be great for China and great for the USA,” Trump said.
Trump has yet to drop plans to impose tariffs that are set to take effect on Dec. 15 on an additional US$160 billion in Chinese products — a move that would extend the sanctions to just about everything China ships to the US.
The December tariffs would cover a wide range of consumer goods, including clothes, toys and smartphones and would likely be felt by many American shoppers.
While providing scant details of just what was agreed to Friday, the White House said Beijing has pledged to be more transparent about how it sets the value of its currency.
The US administration has accused China of manipulating the yuan lower to give its exporters a competitive advantage in foreign markets.
China has also agreed to open its markets to US banks and other financial services providers, US Secretary of the Treasury Steven Mnuchin said.
Earlier on Friday, China announced a timetable for carrying out a promise to allow full foreign ownership of some finance businesses, starting with futures traders on Jan. 1.
Ownership limits would be ended for mutual fund companies on April 1 and for securities firm on Dec. 1.
Until now, foreign investors have been limited to owning 51 percent of such businesses.
For now, the two sides have come to “almost a complete agreement” on both financial services and currency issues, Mnuchin said.
The trade dispute has inflicted an economic toll on both countries. US manufacturers have been hurt by rising costs from the tariffs, and by uncertainty over when and how the trade hostilities might end.
“They’re trying to de-escalate,” said Timothy Keeler, a former chief of staff at the Office of the US Trade Representatives. “I think it serves both sides’ interests, because both sides were feeling pain.”
Stock prices had been up substantially all day, mainly in anticipation of a significant trade agreement.
However, once the White House announced the contours of the tentative accord, the market shed some of its gains.
The US and Chinese negotiators did not deal this week with a major dispute over the Chinese telecommunications giant Huawei Technologies Co (華為). The US has imposed sanctions on Huawei, saying it poses a threat to national security, because its equipment can be used for espionage.
Trump has said he was willing to use Huawei as a bargaining chip in the trade talks.
The US still has in place tariffs on more than US$360 billion of Chinese imports.
What changed Friday was that Trump suspended plans to raise existing tariffs on US$250 billion in Chinese products from 25 to 30 percent next week.
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