China says it has agreed with USA to cancel tariffs in phases

Darnell Taylor
November 8, 2019

A Chinese spokesman says Beijing has agreed with the United States to reduce some punitive tariffs on each other's goods, as part of an initial trade agreement. -China trade war, though experts warn that a final deal isn't over the finish line.

"Both sides agreed to remove the additional tariffs imposed in phases as progress is made on the agreement", said Chinese Ministry of Commerce spokesman Gao Feng.

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

The Chinese Commerce Ministry said the two sides would decide how much tariffs would be rolled back in first phase. Trade hawks in the administration and outside fear that this would be surrendering leverage to China just as the tariffs have begun to seriously crimp the Chinese economy.

"Looking ahead, we think that subdued global growth will continue to weigh on exports", Martin Rasmussen, the China economist at Capital Economics, wrote in a note on Friday.

"This data offers concrete proof that tariffs are taxes paid by American businesses, farmers and consumers - not by China", Americans for Free Trade spokesperson Jonathan Gold said in the Tariffs Hurt the Heartland's analysis.

There had been no indication whether Mr. Trump might agree, which raised the possibility of another breakdown in negotiations.

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The U.S. and China have leveled billions of dollars of retaliatory tariffs on exports from each other for months, sowing uncertainty for many U.S. businesses.

The Oct. 12 agreement helped to ease financial market jitters, but the two sides have yet to report progress on major disagreements over technology and other irritants following 13 rounds of talks.

Dozens of venues have been suggested for a meeting, which had originally been set to take place on the sidelines of a now-cancelled mid-November summit of Asia-Pacific leaders in Chile, a senior Trump administration official told Reuters on Wednesday.

That dampened hopes a face-to-face meeting might produce progress.

There is a divide within the administration over whether rolling back tariffs will give away USA leverage in the negotiations, the sources said.

Commerce Secretary Wilbur Ross this week said any "Phase 1" agreement would be general and cover trade in specific areas such as soybeans and liquefied natural gas.

"In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately", Gao said.

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