READY PHASE ONE
The US and China agree to roll back tariffs on each other’s goods in stages as trade negotiations continue.
The US and China have agreed to roll back tariffs on each other’s goods in stages as negotiations continue over resolving the more than yearlong trade war, officials on both sides said.
“In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement,” China’s Ministry of Commerce spokesman Gao Feng said Thursday.
White House economic adviser Larry Kudlow confirmed the advance in negotiations. “If there’s a phase one trade deal, there are going to be tariff agreements and concessions,” he told Bloomberg.
Despite the progress, markets were mixed with US equity futures edging lower, as other officials to President Donald Trump tamped down expectations for an imminent breakthrough in discussions.
Trade adviser Peter Navarro told Fox Business: “there is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal. The only person who can make that decision is President Donald J Trump. It’s as simple as that.”
An agreement to ratchet back tariffs would pave the way for a de-escalation in the trade war that’s cast a shadow over the world economy. China’s key demand since the start of negotiations has been the removal of punitive tariffs imposed by Mr Trump, which by now apply to the majority of its exports to the US.
“If China, US reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement, which is an important condition for reaching the agreement,” Mr Gao said Thursday.
Asian stocks were mixed yesterday and US equity futures moved lower as the risk-on mood that’s permeated global financial markets this week showed signs of abating.
China’s exports and imports continued to contract in October, data released yesterday showed, though slightly less than forecast by economists. The trade surplus with the US widened in the month to $26.4 billion.
“The question right now is what the two sides have actually agreed on — the market’s focus has shifted to how the US may react to China’s tariff remarks tonight or in coming days,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. “Investors are still cautious.”
The two sides continue to negotiate over where and when a “Phase One” deal would be signed. Mr Gao said he had no further information on the location or timing.
“I am skeptical on how fast the progress will be,” said Iris Pang, economist with ING Bank NV in Hong Kong. “How fast the roll back will be is critical to get material and long lasting positive sentiment for the market as well as for both economies.”