U.S., China agree tentative trade truce ahead of G20 summit: SCMP
Reuters (27/06/2019) - (Reuters) - The United States and China have agreed to a tentative truce in their trade dispute ahead of a meeting between leaders of the two nations at the G20 summit this weekend, the South China Morning Post reported on Thursday, citing sources.
Details of the agreement, which would halt the next round of U.S. tariffs on an additional $300 billion of Chinese goods, are being laid out in press releases and will be out as coordinated press releases and not a joint statement, the newspaper said.
Chinese President Xi Jinping’s meeting with U.S. President Donald Trump is conditional upon Washington agreeing to such a tentative agreement, SCMP reported, citing one source with knowledge of the plans.
Trump is set to hold much-anticipated trade talks with Xi in Osaka at 11:30 a.m. (0230 GMT) on Saturday, a White House spokesman told reporters on Wednesday.
Trump said on Wednesday a trade deal with Xi was possible this weekend but he is prepared to impose U.S. tariffs on virtually all remaining Chinese imports if the two countries continue to disagree.
China and the United States have already imposed tariffs of up to 25% on hundreds of billions of dollars of each other’s goods in a trade war that has lasted nearly a year.
Relations between Washington and Beijing have spiraled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy.
Relations between Washington and Beijing have spiralled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy.
Trump said Chinese leaders "want to make a deal. They want to make a deal more than I do."
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to meet with Chinese Vice Premier Liu He ahead of the Trump-Xi meeting. U.S. Commerce Secretary Wilbur Ross also was added to the U.S. delegation at the last minute at Trump's request, a senior U.S. official said at a Washington event where Ross had been scheduled to speak.
Some Chinese officials who were not previously part of China's delegation were also applying for Japanese visas, an industry source briefed on the matter said, adding that this was a possible sign of momentum for the Trump-Xi meeting.
Shortly after Trump returns from the Osaka summit, he will be in a position to impose a 25% tariff on $300 billion worth of Chinese consumer goods from cellphones, laptop and tablet computers to tube socks and baby carriers.
A public comment period on the tariffs ends on July 2 following seven days of public hearings in which U.S. companies large and small begged to be spared from the tariffs and warned of hardships in shifting production out of China.
"I would do additional tariffs, very substantial additional tariffs, if that doesn't work, if we don't make a deal," Trump said on Wednesday. But he added that he could consider lowering the duty to 10% from the proposed 25%.
Administration officials have said that a 10 percent tariff is more easily offset by Chinese companies absorbing the added costs and by declines in the value of China's yuan currency.
China and the United States have already imposed tariffs of up to 25% on hundreds of billions of dollars of each other's goods in a trade war that has lasted nearly a year.
More than half of Chinese consumers have recently avoided U.S.-made products in support of their country, according to a new poll conducted by London-based advisory firm Brunswick. The poll of 1,000 Chinese and 1,000 American consumers showed that 68 percent of Chinese respondents said their opinions of American firms had become more negative, while 59 percent of Americans had an unfavourable opinion of China-based companies.
Global trade tensions contributed to a 2.1% drop in the April U.S. trade deficit to $50.8 billion as both imports and exports fell, the Commerce Department reported on Wednesday. But the April U.S. trade deficit with China jumped nearly 30% to $26.9 billion, while the trade gap with Mexico fell sharply.
Fitch Ratings on Wednesday forecast that imposing a 25% tariff on the $300 billion in Chinese goods would chop 0.4 percent from world economic output. The International Monetary Fund has forecast a 0.5 percent reduction, equivalent to erasing South Africa's economy.
Trump said China knows what the United States needs for a trade deal, and pushed for China to return to the negotiating table with the same concessions they had made before talks abruptly ended in May.
The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, a U.S. official said on Tuesday.
'DRIVE-BY TARIFFS'
Trump has bipartisan support on taking a tough stance on China, although not for his use of tariffs as a tool to exert pressure on Beijing.
A senior Democrat said on Wednesday he hoped the standoff with China would result in lasting changes.
"We’ve gone this far - we ought to be working to try and have some of the structural changes, some of the advantages, some of the (intellectual property) protections, and China living up to its obligations under the (World Trade Organization)," said U.S. Representative Earl Blumenauer.
Blumenauer, who chairs the House of Representatives' Ways and Means trade subcommittee, said he disagreed with what he called Trump's "drive-by tariffs" and hoped the president would not accept a deal that simply involved selling more goods to China rather than changing bilateral terms of trade.
Trump said if Washington was unable to reach a deal, his plan was to reduce business with China. Asked about companies relocating production from China to Vietnam, he said Vietnam treated the United States even worse than China.
The United States is cracking down on companies that have used countries such as Vietnam and Cambodia as staging posts to ship goods from China to the United States without paying tariffs. – Reuters