Sino/US Phase One Trade Deal Agreed on in Principle
What apparently was agreed on by both sides involves Chinese purchases of US agricultural and other products, protecting US intellectual property, opening Chinese industries to US firms, and adopting rules to deter currency manipulation.
It’s unclear what the US agreed on. On Tuesday, the Wall Street Journal said both sides “are actively considering rolling back some tariffs to clinch the partial trade deal under negotiation, according to people familiar with the talks,” adding:
“If there’s a deal, (removing) tariffs will be part of it,” according to an unnamed senior Trump regime official.
Negotiations continue, both sides yet to approve a limited phase one agreement.
The South China Morning Post (SCMP) reported that Beijing “will avoid giving too many concessions, sources and diplomatic observers said.”
Academic Shi Yinhong explained that China’s reported willingness to buy up to $50 billion worth of US agricultural products over the next two years may be beyond the country’s needs.
He also expressed concern over whether the initial deal’s wording might violate WTO principles, adding:
“If we want the deal to last and be implementable, it has to be concrete and hence (preparation) takes time.”
“If two countries reach a deal very quickly, it will be generalized, ambiguous, and have big potential to blow up in the future.”
“I don’t see enough evidence to suggest that bilateral ties have improved to the extent that both sides can reach a concrete and implementable agreement in the short term.”
SCMP said chief negotiators of both countries reached “consensus on principles” of a limited phase one deal.
China’s chief negotiator/Vice-Premier Liu He was quoted saying the US should abandon “wishful thinking” that major bilateral differences can be resolved easily and quickly in the weeks ahead.
On Monday, Bloomberg News reported that China wants Trump regime tariffs on $360 billion worth of its exports to the US rolled back as part of a phase one deal, adding:
Chinese negotiators want “tariffs on about $110 billion in goods that were imposed in September (dropped), the 25% tariff rate on (the remaining) $250 billion” lowered, citing unnamed US officials familiar with discussions.
Beijing also demands no imposition of further duties on its imports — notably on $160 billion worth of Chinese goods scheduled to take effect on December 15.
So far, no agreement was reached on where President Xi Jinping and Trump will meet to sign the phase one agreement, Iowa and Alaska named as possible locations.
Whatever is agreed on is subject to Trump’s whims, notoriously announcing one thing, then doing something entirely different.
If he agrees to partially roll back tariffs on Chinese imports, they can be reimposed quickly with a policy directive if impasse continues after follow-up negotiations.
Trump said phase two talks will begin when current ones conclude. China clearly won’t accept US demands that aim to undermine its economic, financial, industrial, military, technological development.
Follow-up talks on major issues are highly likely to remain at impasse because of unacceptable US demands.
They cutt to the heart of key bilateral differences — unlikely to be resolved no matter how many future rounds of talks are held.
My newest book as editor and contributor is titled “Flashpoint in Ukraine: How the US Drive for Hegemony Risks WW III.”