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China presses Trump for more tariff roll-backs in 'phase one' trade deal

Stock MarketsNov 05, 2019 07:48AM ET
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By David Lawder and Andrea Shalal

WASHINGTON (Reuters) - China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a "phase one" U.S.-China trade deal, people familiar with the negotiations said on Monday.

The deal, which may be signed this month by Trump and Chinese President Xi Jinping at a yet-to-be determined location, is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys.

A U.S. official said the fate of the Dec. 15 tariffs is being considered as part of negotiations and a potential signing trip this month.

Another source briefed on the talks said Chinese negotiators want Washington to drop 15% tariffs on about $125 billion worth of Chinese goods that went into effect on Sept. 1. They are also seeking relief from earlier 25% tariffs on about $250 billion of imports from machinery and semiconductors to furniture.

A person familiar with China's negotiating position said it is continuing to press Washington to "remove all tariffs as soon as possible."

China's request to remove the Sept. 1 duties was earlier reported by Politico, citing sources. The Financial Times newspaper also reported the White House was considering whether to roll back the Sept. 1 tariffs, which cover some clothing items, flat-screen televisions, smart speakers and Bluetooth headphones.

Geng Shuang, a spokesman at the Chinese foreign ministry, said the two sides remained in touch.

"Trade consultations have made progress and are advancing in accordance to plan," Geng said.

On the tariff issue, Geng said he could only give an answer "in principle".

"Adding tariffs is not the correct way to resolve trade issues," he told reporters at a regular briefing in Beijing on Tuesday.Taoran Notes, an influential WeChat account run by China's Economic Daily, said the removal of the additional tariffs already imposed by the United States was China's "most core concern".

"Any miscalculation on this issue could well cause further back and forth in the consultations," it wrote.

Ralph Winnie, director of the China program at the Eurasia Center, said wrapping up the interim trade pact would provide a boost to both the U.S. and Chinese economies, while handing Trump an important win among farmers - a core constituency.

"It’s in both countries’ interest to have this trade deal," Winnie said. "If he seals the deal, it will be looked on very favorably by the American people. It’s a win-win for both countries."

Speaking on Tuesday at an import fair aimed at burnishing China's free-trade credentials, President Xi Jinping called on countries to stand against protectionism and reiterated pledges to open China's economy and strengthen protection of intellectual property rights.

Foreign governments and business groups have become skeptical of Chinese reform promises and have longed warned that China would invite retaliation if it didn't match the openness of its trading partners.

COPYRIGHTS, NOT SUBSIDIES

Since Trump took office in 2017, his administration has been pressing China to curb massive subsidies to state-owned firms and end the forced transfer of American technology to Chinese firms as a price of doing business in China.

Analysts say the phase one deal will fail to adequately address these issues, focusing largely on Chinese purchases of U.S. farm goods and intellectual property protections related to copyright and trademark issues. It will not address industrial subsidies at all.

China was requesting some changes to the text, but parts of the agreement are “very close to finished,” including the text on financial services, said a U.S. source briefed on the negotiations. The text on agriculture was “dozens of pages long and nearly completed,” the source said.

“It is important to both sides to get this agreement across the finish line,” said the source, adding that the two presidents were very likely to meet this month.

Charles Boustany, a former congressman from Louisiana and counselor at the National Bureau of Asian Research, said any initial agreement would likely be short-term in nature and unstable.

"Even though there's some talk about a phase one agreement, we don't think it’s going to be substantive in terms of addressing any of the structural problems," he said. "It would largely be a status quo situation where China continues to do what it’s doing."

Some business groups complain that a central component of the "phase one" deal - increased access to China's financial services market - will fall short of its promises, because of inconsistencies in China's new foreign investment law.

In comments submitted to the Chinese government by the U.S. Chamber of Commerce, the American Chamber of Commerce in China and the U.S. Information Technology Office, the groups pointed out that Beijing's draft regulations "do not address clear differences between the treatment of China's state-owned enterprises and the private sector," according to a person familiar with the comments.

Trump had said on Friday that negotiations on the initial phase agreement were going well and he hoped to sign the deal with Xi at a U.S. location when work on it was completed.

China presses Trump for more tariff roll-backs in 'phase one' trade deal
 

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Comments (19)
Mario Rossi
Mario Rossi Nov 05, 2019 10:54AM ET
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If US cuts tariffs China will not proceed to other points. It has been too much without any Chinese rule
Dikshit Jain
Dikshit Jain Nov 05, 2019 10:51AM ET
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nothing is happening ...hollow deal absolutely ,also trump will take all the credit for stock market appreciation and will try to influence voters to vote him for upcoming elections
Notvery Goodathis
Peteymcletey Nov 05, 2019 8:25AM ET
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US may have officially lost. Trade deal last year was the best we could have had. The "deal" they eventually agree to will be hollow. Absolutely nothing will have happened except China strengthening it's ties with the rest of the world.
Buzzy Jefferson
Buzzy Jefferson Nov 05, 2019 4:15AM ET
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US markets are doing well because the US is doing well. We are building factories, unemployment is at record lows, wages are increasing, and the world is investing in our companies more than any others. Student debt and housing are certainly issues, but as the southern wall progresses and Trump gets re-elected, the Feds will pay more attention to the failed democrat cities that are in serious need of oversight and intervention. If we can stop the fentanyl from China, the heroin from Mexico, and the opioids from pharma, that would be another positive. Our military is amazing right now. China is in a tail spin. Their massive population is aging out, and the world is sick and tired of doing business there. Meteoric rise - Meteoric crash and burn..  Definitely time to raise tariffs, block Xi's number, and continue disengagement. Zaijian lying cheaters!
Jose Aguiar
Jose Aguiar Nov 05, 2019 4:15AM ET
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hahahaha
Ian Serra
That_Guy Nov 05, 2019 4:15AM ET
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someone definitely needs to do more of their own research into things
Paul Wall
Paul Wall Nov 05, 2019 4:15AM ET
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how dare you be positive about this country under a Republican President...don't you know all the credit goes to Obama?! lol
Al Vlaj
alvlaj Nov 05, 2019 4:15AM ET
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US markets rose from Bear Stearns collapse to Lehman’s collapse for the same reason you lay out. The nationalist groundwork Trump layed out is the same as Smoot-Hawley. This is how the great depression started.
Dong Chang
Dong Chang Nov 05, 2019 3:42AM ET
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Xi is Mao 2.0 with 60's Soviet Khrushchev style and with future China 2025 ambitious mentality.  His power is even more secured after CPC Plenary meeting last week.  Watch out he could be a biggest threat to the U.S.
Fakhri Alisoy
Fakhri Alisoy Nov 05, 2019 3:04AM ET
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now the time to put down future indices ..be ready ..no more sense gents ..nothing personal is just business
Bade Sahib
Bade Sahib Nov 05, 2019 1:19AM ET
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Fake news no deal mark my words
Bade Sahib
Bade Sahib Nov 05, 2019 1:19AM ET
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Markets are making a big dealof a useless deal
Jon Buh
Jon Buh Nov 05, 2019 12:40AM ET
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people familiar said. person familiar said. who are theyyyy
Kenny Venezia
Kenny Venezia Nov 04, 2019 11:23PM ET
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this deal means very little.
Patrick Higdon
Patrick Higdon Nov 04, 2019 9:29PM ET
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Unpopular opinion, all governments should leave the markets alone and stop taxing them.
PREDATOR COC
PREDATOR COC Nov 04, 2019 9:28PM ET
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Xi is the man of honor. He kept his promise for Trump requested. But this greedy Trump will not satisfy and ask for more. He thought he had an upper hand...
akljsdf askldf
akljsdf askldf Nov 04, 2019 9:28PM ET
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are you sarcastic
Cee Kay
Cee Kay Nov 04, 2019 9:16PM ET
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Trump will keeps it as leverage for phase 2.
Greg Hamilton
OptionsTrader Nov 04, 2019 8:59PM ET
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Both sides just remove all tarriffs and get on with business.
eddie glass
eddie glass Nov 04, 2019 8:50PM ET
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trump has no need to make a deal while market keeps nonsensically breaking into all time highs. why give away his tool to pop the market when it is not needed.
Mr Hans
Mr Hans Nov 04, 2019 7:19PM ET
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he has to do it. he's in a position like a pokerplayer, where everybody knows his hand. ge can't let the stockmarket and economy crash so close to the election
eddie glass
eddie glass Nov 04, 2019 7:19PM ET
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this has been his ace up the sleeve. market has been pumping to all time highs for no reason, none of the wall street boys willing to bring down the market despite all the non-stop saying trump would crash the economy all last election. now they have handed trump 2020 by giving him the power to run the market at any time this close to an election.
eddie glass
eddie glass Nov 04, 2019 7:19PM ET
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and he really has no need to do it now while market keeps running to all time highs. really doubt he will make any deal while markets are doing so well. will save it for when he needs it.
One Peace
One Peace Nov 04, 2019 7:17PM ET
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it depends on how nationalist US.
Hank Williams
Hank Williams Nov 04, 2019 4:50PM ET
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He will do it. The kitchen is getting hot.
Erski Gumby
SB20 Nov 04, 2019 4:50PM ET
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Hot enough to cook bacon?
Ian Serra
That_Guy Nov 04, 2019 4:50PM ET
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Erski Gumby mmmmm bacon
peter neal
peter neal Nov 04, 2019 4:44PM ET
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It won't happen
 
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