US and China Reportedly Ready to Strike a ‘Phase One’ Trade Deal

The United States has reportedly offered to cancel a new round of tariffs scheduled for this weekend as well as eliminate existing duties by as much as one-half on about $360 billion in Chinese imports.

Citing sources familiar with the matter, The Wall Street Journal reported that negotiators have agreed to do away with the upcoming 15% levy on certain Chinese imports set to take effect on Dec. 15, which would have impacted a wide array of consumer goods including footwear, apparel and accessories.

As part of their limited trade deal, reported the WSJ, Washington has insisted that Beijing purchase greater quantities of agricultural and other products, and negotiators have sought better protection for U.S. intellectual property rights and wider access to China’s financial services sector. A clause known as a “snapback” provision would put back in place the tariff rates if China fails to deliver on those promises.

The reported decision follows an afternoon meeting between President Donald Trump and top economic advisors, such as U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. If an agreement is not reached by Sunday, additional U.S. duties on Chinese items will take effect.

Early in the day, Trump suggested that the U.S. was nearing an agreement that could put a halt to its protracted trade war with China. Taking to Twitter, he wrote that the White House was “getting very close to a big deal,” adding, “They want it, and so do we!”

At a news briefing today, Chinese Commerce Ministry spokesperson Gao Feng said, “Trade teams from both sides are maintaining close communications.”

Over the past year and a half, the U.S. and China have imposed tit-for-tat duties on one another. America currently has in place a 25% tariff on roughly $250 billion worth of Chinese products and a 15% levy on an additional $111 billion.

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