China and US agree to phase out trade duties
The Chinese Ministry of Commerce said Thursday, without specifying a timeframe, that China and the US have agreed to phase out trade duties imposed during their months-long trade war..
The temporary U.S.-China trade deal is expected to include a U.S. commitment to waive tariffs, scheduled to be introduced on December 15, on approximately $ 156 billion worth of imports from China, including mobile phones, laptops and toys..
Here’s a breakdown of the U.S.-China phase one trade deal
Ministry spokesman Gao Feng said the abolition of trade duties is an essential condition for any agreement, adding that both sides must simultaneously abolish some tariffs on each other’s goods in order to achieve «first phase» trade deal.
«Trade war started with tariffs and should end with tariff abolition», – said Gao at a regular briefing.
«Over the past two weeks, the leading negotiators on both sides have had serious and constructive discussions on how to properly address various underlying issues, Gao said. – Both sides agreed to abolish additional duties as they made progress in negotiations».
He did not give specific dates.
China’s state-run news agency Xinhua reports that Chinese customs and agriculture are considering lifting restrictions on U.S. poultry imports.
Beijing’s signal that the first phase of its trade deal with the United States was close to closing helped European stock markets hit a more than 4-year high on Thursday, and bond yields surged. New hopes for the first phase of the trade agreement pushed US stock index futures on Thursday morning, when Dow futures should open more than 120 pips higher.
Earlier, a source told Reuters that Chinese negotiators wanted the United States to cut trade duties on Chinese goods worth about $ 125 billion by 15%, which took effect September 1..
China also wants to remove the previous 25% import duties on goods from machinery and semiconductors to furniture, worth about $ 250 billion..
A source familiar with China’s negotiating position said they insist that Washington «removed all tariffs as soon as possible».
The agreement could be signed this month by US President Donald Trump and Chinese President Xi Jinping in an as yet undefined location.
Dozens of seats have been offered for the meeting, which was originally scheduled to take place in mid-November on the sidelines of the Asia-Pacific leaders’ summit in Chile, which is now canceled, a senior Trump administration official told Reuters on Wednesday..
One possible location could be London, where leaders could meet after the NATO summit, which Trump is due to attend on December 3-4, the official said..
Gao declined to say when and where such a meeting could take place.
Chinese Foreign Ministry spokeswoman Hua Chuning said Xi’s November 10-15 trip will include a state visit to Greece and participation in a summit of developing countries in Brazil. The statement did not mention the United States or whether any meeting was held between Xi and US President Donald Trump during the trip. The announcement came amid growing speculation about when and where Xi might meet with Trump to sign an initial deal based on the progress made in the negotiations..
Since Trump took office in 2017, his administration has pushed for China to curb massive subsidies to state-owned firms and end the forced transfer of American technology to Chinese firms as payment for doing business in China..
Analysts are skeptical that the Phase 1 trade deal will effectively address existing problems, believing that the two economic giants will need a more comprehensive agreement before market sentiment begins to normalize..
At a recent private event in Washington for members of the US-China Business Council, a non-profit organization that aims to facilitate trade between countries, a senior Chinese diplomat said that the president’s meeting seemed «extremely important» for Trump, but Beijing does not consider this critical. According to a source for The South China Morning Post, the Chinese diplomat also said Beijing believes Trump is fixated on the first phase of the deal for domestic political purposes..
Chinese diplomatic observers said both sides need an initial deal, but that the US needs to respond more clearly to China’s main concerns over tariff lifting.
White House spokesman Judd Deere said Wednesday that talks between the two countries are ongoing.. «Negotiations are continuing, and progress has been made on the text of the first stage, he said. – We will let you know when we have an announcement about the place of signing».