US Said to Reach Deal in Principle on Trade With China

Daniel Fowler
December 13, 2019

USA negotiators have reached the terms of a phase-one trade deal with China that now awaits President Donald Trump's approval, according to people briefed on the plans.

President Trump has not announced yet whether he would follow through or delay the December 15 tariffs, and he is expected to meet later on Thursday with his economic team to discuss the state of the trade negotiations with China.

The White House had no comment on any tariff reduction offers.

The terms have been agreed but the legal text has not yet been finalized, according to the people.

"It's a good starting point", Chamber of Commerce head of global affairs Myron Brilliant told broadcaster CNBC after meeting with White House officials.

US stocks rose and Treasury yields spiked on the news.

China's government says negotiators are in "close communication" with Washington ahead of a weekend deadline for a USA tariff hike.

But they continue to disagree about the amount of U.S. farm products that China should buy, as well as how they should peel back the tariffs they've imposed.

Share prices on Wall Street have surged to record levels after Donald Trump boosted hopes of an imminent trade deal with China.

It was also reported that Washington planned to suspend new tariffs, scheduled for Sunday on $US160 worth of Chinese imports, in an attempt to secure a "phase one" trade deal with Beijing.

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The U.S. has added a 25 per cent duty on about US$250 billion of Chinese products and a 15 per cent levy on another US$110 billion of its imports over the course of a roughly 20-month trade war.

The S&P index recorded 73 new 52-week highs and one new low, while the Nasdaq recorded 147 new highs and 28 new lows.

Negotiators from the US and China have been working to pin down a partial "phase one" agreement that would address issues such as currency policy and Chinese purchases of American agricultural goods.

The US has said the tariffs are aimed at making China give up "unfair" trade practices, including alleged intellectual property theft.

The two sides are negotiating a Phase 1 agreement as part of the effort to resolve their sprawling trade dispute.

China has retaliated by raising duties on $160 billion of American goods but has been running out of imports for retaliation due to the lopsided trade balance.

Before today, Trump's advisers have sent conflicting signals and stressed that he hadn't made up his mind on the next steps.

Either Lighthizer and Chinese Ambassador to the U.S. Cui Tiankai could sign the deal Friday, The Washington Post reported.

"The outcome of U.S". -China trade war, according to a source briefed on the trade talks.

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