U.S., China Move Closer to Trade Deal Despite Harsh Rhetoric, Sources Say
(Bloomberg) — The U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said.
U.S. President Donald Trump’s comments Tuesday downplaying the urgency of a deal shouldn’t be understood to mean the talks were stalling, as he was speaking off the cuff, according to the people, who asked not to be identified. Recent U.S. legislation seeking to sanction Chinese officials over human-rights issues in Hong Kong and Xinjiang are unlikely to affect the talks, one person familiar with Beijing’s thinking said.
U.S. negotiators expect a phase-one deal with China to be completed before American tariffs are set to rise Dec. 15, the people said. Outstanding issues in the talks include how to guarantee China’s purchases of U.S. agricultural goods and exactly which tariffs to roll back, they said.
U.S. Trade Representative Robert Lighthizer’s office didn’t respond to a request for comment. China’s Ministry of Commerce didn’t immediately respond to a fax seeking comment.
China’s Foreign Minister Wang Yi was asked in Seoul whether the trade talks can be finished this year.
“It depends,” he said, according to Phoenix TV. “China’s stance is very clear. There is hope, as long as it is based on mutual respect and equal consultations.”
Stocks rallied in Europe, and U.S. equity futures advanced, rebounding from declines Tuesday tied to Trump’s comments that he doesn’t have a deadline to sign an agreement with Beijing. The offshore yuan reversed declines to gain as much as 0.25%.
Investors are closely watching for any signs of progress on a phase-one deal as worries increase that Trump may slap more tariffs on China later this month. The U.S. House of Representatives overwhelmingly approved legislation Tuesday that would impose sanctions on Chinese officials over alleged human-rights abuses against Muslim minorities, prompting Beijing to threaten retaliation.
China foreign ministry spokeswoman Hua Chunying blasted U.S. lawmakers Wednesday as “too ignorant, too shameless and too hypocritical.”
While officials from both nations have emphasized repeatedly that talks are making progress and that they remain in constant contact, the negative rhetoric on both sides recently has heightened fears that the negotiations could drag on. That’s despite the fact that Trump’s strategy in trade talks has long been to downplay his desire for a deal and slow-walk a negotiating partner.
Commerce Secretary Wilbur Ross said Tuesday the U.S. will go ahead with its plan to add tariffs on Chinese products if nothing changes come mid-December. A report from Chinese state media earlier indicated the government would soon publish a list of “unreliable entities” that could lead to sanctions against U.S. companies if the Xinjiang bill passed.
Trump didn’t initiate the bill involving Xinjiang and a law supporting protesters in Hong Kong, and they are separate issues to the trade talks, according to Lu Xiang, an expert in bilateral ties at the state-run Chinese Academy of Social Sciences in Beijing, which is affiliated with the State Council.
“If the U.S. follows through with the threat of tariffs on Dec. 15, that is definitely a reescalation, and China will retaliate,” Lu said. Trump is “still weighing the conditions for a deal, but for his political interests, he needs a deal ― no matter if it is signed in December, January or February.”
Contact editor Han Wei (email@example.com)
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