Hopes of an imminent solution to the trade dispute between the world’s two largest economies – the United States and China – have been dampened after President Donald Trump said Washington hasn’t agreed to roll back all tariffs on Beijing.
Obviously, this has sparked fresh doubts about when the two countries might end a 16-month trade war that has already slowed global growth.
The Trump administration has slapped tariffs on more than $500bn in Chinese goods, while Beijing has put duties on about $110bn in American products.
China has pushed for the US to remove tariffs, which have the potential to wreak havoc on the global economy, as part of an agreement.
China and the United States were on the brink of reaching a deal in May when Beijing backed away from it, prompting Trump to raise tariff rates and embark on new rounds of punitive duties.
“They’d like to have a rollback, I haven’t agreed to anything,” Trump told reporters on Friday. “China would like to get somewhat of a rollback – not a complete rollback, because they know I won’t do it.”
Earlier last week, signs were pointing toward a first-phase deal that would include a tariff rollback. China’s Ministry of Commerce spokesman Gao Feng said negotiators had discussions and “agreed to remove the additional tariffs in phases as progress is made on the agreement.”
White House economic adviser Larry Kudlow also said recently that “if there’s a phase one trade deal, there are going to be tariff agreements and concessions.”
But President Trump made clear that the US hasn’t yet reached an agreement and emphasised that he wouldn’t eliminate all tariffs. There is an expectation that tariffs scheduled for December 15, which would hit popular consumer items like smartphones and toys, won’t take effect as part of an initial deal.
But a lot of tariffs remain in place including a 15% tariff on an additional $110bn in goods that took effect on September 1.
The US and China have worked to sign what the White House has described as a “phase one” trade deal. President Trump hopes to resolve outstanding gripes with Beijing’s trade practices, including forced technology transfers and intellectual property theft, while securing more Chinese purchases of US agricultural goods.
Trump and Chinese President Xi Jinping have looked for a venue to sign the first piece of the trade deal. They had planned to sign the agreement at the Asia-Pacific Economic Co-operation conference in Chile later this month, before that country’s president cancelled the event due to protests, mainly in the south American country’s capital Santiago.
Trump revived questions Friday about the location for signing any deal with his Chinese counterpart Xi Jinping. Reports earlier this week indicated any finalisation of a first-phase agreement might slip until December and that some US locations had been ruled out.
China’s exports and imports continued to contract in October, data released on Friday showed, though slightly less than forecast by economists. According to a Bloomberg dispatch, the escalating trade war between the two countries has also taken a toll on US manufacturing and business investment.
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