Trump says US, China have reached deal; Sunday tariffs off

Photo: The Canadian Press

President Donald Trump said Friday that the U.S. has cancelled plans to impose new tariffs on $160 billion worth of Chinese imports Sunday as part of a modest interim agreement that de-escalates a 17-month trade war between the world's two biggest economies.

The United States is also reducing existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%

In return, Trump said on Twitter, the Chinese have agreed to "massive'' purchases of American farm and manufactured products as part of a so-called Phase 1 deal. The office of Trump's trade representative said China had consented to "structural reforms'' that would improve intellectual property protection and curb the practice of forcing foreign companies to hand over technology as the price of admission to the Chinese market. But it offered no details, and business groups said more needed to be done to combat Beijing's aggressive trade practices.

“This deal should go a long way in reversing the downward spiral in bilateral trade relations and increasing certainty for U.S. businesses," said Wendy Cutler, a former U.S. trade negotiator who is now vice-president at the Asia Society Policy Institute. But, she said, ``it’s unclear on how far the Phase 1 agreement goes in addressing the key structural issues that brought the U.S. to the negotiating table 17 months ago.''

Trump’s announcement came minutes after the House Judiciary Committee approved impeachment charges of abuse of power and obstruction of Congress, leading the White House to argue that the president “never stops working and continues to make successful deals that benefit this country.”

Chinese officials said at a briefing in Beijing Friday that if Washington reduces the tariffs, China will lower its trade penalties on American goods and also scrap plans for new tariffs Sunday.

Trump told reporters at the White House that Chinese farm purchases would hit $50 billion. China's deputy finance minister Liao Min said “China is ready to work with the U.S. side to do more to promote growth in trade'' but would not confirm the $50 billion figure. U.S. farm exports to China have never topped $26 billion a year.

The deal announced Friday leaves unresolved some of the thorniest issues. But Trump said work on a follow-up would begin ``immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!''

Friday's announcement was a long time coming. Trump first announced a Phase 1 deal on Oct. 11, but negotiations on a final version continued for two months.

Financial markets rallied in Asia on hopes for reduced trade tension. But stocks were down modestly in early trading on Wall Street.

The administration accuses China of cheating in its drive to develop advanced technologies as driverless cars and artificial intelligence. The administration alleges, and independent analysts generally agree, that China steals technology, forces foreign companies to hand over trade secrets, unfairly subsidizes its own firms and throws up bureaucratic hurdles for foreign rivals.

Beijing rejects the accusations and contends that Washington is simply trying to suppress a rising competitor in international trade.