Published: Fri, November 08, 2019
Markets | By Otis Pena

Potential US China trade deal would remove tariffs

Potential US China trade deal would remove tariffs

Trump administration officials have expressed optimism that phase one of a comprehensive trade deal might come together this month, helping boost equity markets to records this week.

Over the past couple of weeks, delegates from the US and China have had "serious and constructive" discussions in an effort to secure a deal that would end their more-than-yearlong tariff dispute, Gao added.

The two sides have been trying to negotiate a limited trade deal that would entail the US dropping some tariffs on Chinese imports in exchange for Beijing resuming purchases of American farm goods and other products. -China trade war, though experts warn that a final deal isn't over the finish line.

U.S. stocks looked set to hit a fresh record high after the Chinese commerce ministry revealed that tariffs on goods worth hundreds of billions of dollars will be lifted in stages as progress is made on the deal.

"China and the United States have agreed to cancel in phases the tariffs that were imposed during their trade confrontation", Chinese Commerce Ministry Spokesperson Gao Feng said on Thursday.

Governments of the two biggest global economies have raised tariffs on billions of dollars of each other's goods in the fight over China's trade surplus and technology ambitions.

The Chinese Commerce Ministry said the two sides would decide how much tariffs would be rolled back in first phase.

Wall Street nonetheless rose on Thursday on signs of the breakthrough in trade talks.

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Officials said such an outcome would dispel some of the uncertainty now depressing business investment and consumer spending. The governor though did not rule out extending his time at the helm for a third time if asked by the government.

That weighs on trade and threatens to depress global economic growth that already shows signs of slowing. Locations in Asia and Europe are now being considered instead, the person said, asking not to be identified because the discussions aren't public.

President Trump, who agreed to postpone a planned tariff hike while lower-level officials hammered out details, said China had agreed to buy up to $50 billion of American farm goods.

The report added there is a divide over removal of tariffs amid concerns that it could be disadvantageous to Washington in negotiations with Beijing.

Analysts say the phase one deal will fail to adequately address these issues, focusing largely on Chinese purchases of USA farm goods and intellectual property protections related to copyright and trademark issues.

The idea of a tariff rollback was not part of the original October "handshake" deal between Chinese Vice Premier Liu He and U.S. President Donald Trump, the sources said.

The Trump administration has been adamant that US consumers aren't bearing the brunt of the tariffs.

U.S. Commerce Secretary Wilbur Ross said this week any "Phase 1" agreement would be general and cover trade in specific areas such as soybeans and liquefied natural gas. More complex issues would be tackled in later negotiations, he said.

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