Published: Tue, March 05, 2019
Markets | By Otis Pena

US says it's made 'progress' in trade talks with China

US says it's made 'progress' in trade talks with China

It could persuade Beijing that Trump is desperate for a win, or China might take it as a sign that Trump, as his advisErs say, is willing to walk away from a bad deal.

The United States and China appear close to a deal that would roll back USA tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on US goods, a source briefed on negotiations said on Sunday.

US President Donald Trump said he had asked China to immediately remove all tariffs on USA agricultural products because trade talks were progressing well.

China has so far had luck on convincing Mr Trump to pull back on tariffs. The U.S. wants to continue to wield the threat of tariffs as leverage to ensure China won't renege on the deal, and only lift the duties fully when Beijing implemented all parts of the agreement.

U.S. President Donald Trump and China's President Xi Jinping shake hands after making joint statements at the Great Hall of the People in Beijing, China, November 9, 2017.

Trump had forecast a summit meeting with Chinese President Xi Jinping to finalize details in a bilateral trade agreement to tackle deeper issues, including greater transparency around subsidies and state-owned enterprises (SOEs) from China, addressing USA concerns over forced technology transfer, and intellectual property protection.

China is offering to lower tariffs on USA farm, chemical, auto and other products, the newspaper said, citing people familiar.

"For China, any such agreement would be politically challenging, but would provide a welcome respite from mounting economic pressures", said EIU.

As part of a deal, China is pledging to speed up the timetable for removing foreign-ownership limitations on auto ventures, and to reduce tariffs on imported vehicles to below the current rate of 15 per cent, the newspaper reported.

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President Donald Trump speaks at the CPAC convention in Oxon Hill, Md., on March 2, 2019. He added that the relationship with the DPRK seemed to be " very , very strong".

USA officials said past year the administration was considering sanctions against companies and officials linked to China's crackdown, including Xinjiang Party Secretary Chen Quanguo, a member of the Chinese leadership's powerful politburo.

Asked during a congressional hearing last week whether a deal would see a lifting of US tariffs, Robert Lighthizer, the China hawk now leading the talks with Beijing, would say only that was China's desire.

But investors are clearly excited about the latest sign that the US and China are making progress toward a pact.

A deal would be welcomed by financial markets, which have suffered through the often-rancorous trade conflict between the world's two largest economic powers.

He also delayed plans to impose 25 percent tariffs on Chinese goods on Friday, as previously scheduled.

Mr Trump on Friday asked China to immediately remove all tariffs on United States agriculture, though he didn't indicate if his demand was limited to retaliatory duties or more far-reaching.

Political hurdles remain, the Journal reported, according to the people briefed on the matter.

China has offered to increase purchases of U.S. goods by US$1.2 trillion (S$1.63 billion) over six years, benefiting agriculture and energy.

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