October 14, 2019–High-level trade talks between U.S. and Chinese leaders last week produced some results but left the possibility for higher tariffs open in December if details are not settled.
“We have a great deal. We’re papering it now,” U.S. President Donald Trump said on Saturday. “China is going to keep their word. They want to make the deal.”
China’s chief negotiator signaled modest support. “We have made substantial progress in many fields,” Vice Premier Liu He said through an interpreter on Friday. “We are happy about it.”
The partial deal, which is not yet settled, comes at a time when trade between the two countries has fallen. According to a report today in the Financial Times, China’s imports from the United States fell 26.4 percent in September while its exports to U.S. buyers dropped by 10.7 percent.
Negotiators are expected to continue working out the details that the two leaders could sign at an Asia-Pacific Economic Cooperation meeting in Chile in mid November.
Areas of Agreement
The United States will not raise tariffs from 25 percent to 30 percent tomorrow on select $250 billion of Chinese goods thanks to a loose agreement between the two countries. Trump said China agreed in the partial deal to purchase more U.S. agricultural products. He referred to it as phase one of a two- or three-part trade deal.
In addition to agriculture sales, U.S. Treasury Secretary Steven Mnuchin said the initial agreement includes financial services, currency, foreign exchange and intellectual property rights. He held out the possibility of raising tariffs December 15 if ongoing talks over do not produce results.
“We made substantial progress last week in the negotiations,” Mnuchin told CNBC on Monday. “We have every expectation that phase one will close.”
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