US and China close to deal

Markets welcome news of trade breakthrough

THE US was poised yesterday to announce a historic trade deal with China, days before new tariffs are due to kick in between the world’s two largest economies, easing a commercial dispute that has hit markets for almost two years.

Reports that Washington and Beijing had struck a bargain at last – subject to approval by US President Donald Trump – sent US stocks sailing to their first record closes of December.

“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” Mr

Trump (pictured) tweeted in a markedly optimistic tone.

Mr Trump’s flagging of an imminent breakthrough comes ahead of new tariffs planned to take effect tomorrow.

With his 2020 re-election battle heating up and in the face of impeachment proceedings, Mr Trump is keen to seize the political initiative and show voters his punishing struggle with China has brought results.

The US ultimately wants China to open its vast economy to more goods and to conduct sweeping reforms of what

Washington has long called systemic abuse against foreign investors.

Recently, though, White House officials have indicated they would settle for less in a so-called “phase one” deal.

The Washington Post reported that Mr Trump had signed off on a swap of tariff reductions in return for China spending $50 billion on US farm goods, tightening its intellectual property protections and opening its financial services markets. China’s commerce ministry said yesterday that the two sides were in “close” contact ahead of tomorrow’s deadline.

In addition to existing tariffs, Mr Trump had threatened to impose a 15 per cent levy on about $160 billion of Chinese exports, including popular US consumer goods such as electronics and clothing.

China had previously said it would respond with a 25 per cent tariff on US autos and a 5 per cent tariff on auto parts – levies that were suspended earlier this year as a goodwill gesture.

According to The Wall Street Journal, the US side is offering to scrap the threatened tariffs and also cut existing duties imposed on about $360 billion in Chinese goods.

Mr Trump’s overall goal with China, a keystone of his presidency, is to uproot what Washington says are Beijing’s predatory trade practices, including forced technology transfers and massive intellectual property theft.