U.S. and China agree to roll back some tariffs if trade deal is struck
Commitment marks first time White House looks to bend
The United States and China have agreed that an initial trade deal between the two countries would roll back a portion of the tariffs placed on each other’s products, a significant step toward defusing tensions between the world’s two largest economies.
The so-called “phase one” agreement has not been finalized, and a deal could fail to materialize as it has in previous rounds of negotiations. But if a pact is reached, the Trump administration has committed to rolling back some tariffs, according to people familiar with the negotiations.
The commitment marks the first time the United States has agreed to remove any of the tariffs it has placed on $360 billion worth of Chinese goods. While President Donald Trump canceled a planned tariff increase in October, he has routinely dangled the prospect of additional tariffs if Beijing does not change its economic practices and accede to America’s trade terms.
The development suggests the two sides are moving closer to a deal that would provide relief to businesses and consumers that have struggled with the additional costs of tariffs. Trump and his Chinese counterpart, Xi Jinping, are facing increasing political and economic pressure to resolve their 19-month trade fight, which has inflicted pain on both sides of the Pacific.
Investors have already begun anticipating some type of resolution. Stocks soared Thursday after the Chinese government said Beijing and the Trump administration had agreed to remove some tariffs as part of any deal.
Gao Feng, a spokesman for China’s Commerce Ministry, said at his weekly news conference in Beijing that China was insisting that any deal include tariff reductions and that the United States had agreed to remove tariffs as part of an agreement.
“In the past two weeks, the leaders of the two sides have conducted a serious and constructive discussion on properly addressing the concerns of both sides, and agreed to cancel the tariffs by stages in accordance with the development of the agreement,” he said.
Gao did not specify what
tariffs might be dropped, or when.
Last month, Trump announced that he would drop his plan to increase tariffs to 30% on Oct. 15 as part of a first-phase trade deal, but made no mention of the tariffs he had already placed on more than $360 billion of Chinese products.
Since then, the United States has begun considering rolling back tariffs put in place Sept. 1 on more than $100 billion of Chinese food, clothing, lawn mowers and other products, according to people briefed on the discussions.
Markets, which Trump pays close attention to, are increasingly optimistic about the chances for a deal and have been rising steadily. On Wall Street, the S&P 500 was up more than a half a percentage point shortly after 12 p.m., to more than 3,090, putting it on track to hit a record closing high.
Shares of companies with close ties to China’s vast manufacturing base, such as semiconductor manufacturers and retailers, also rose.
Trump took notice Thursday, saying in a tweet “Stock market up big today. A New Record. Enjoy!”
While markets are booming, farm and manufacturing states continue to struggle under the weight of Trump’s trade war, which has included retaliatory tariffs on U.S. goods.