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A US 'deal in principle' with China on trade may be more limited than October pledge
[WASHINGTON] The White House reached a "deal in principle" with Beijing on trade, sources briefed on the talks said on Thursday, but it may be narrower than the "Phase 1" deal US President Donald Trump promised in October.
In the current deal, the United States would suspend tariffs expected to go into effect on US$160 billion in Chinese goods, and Beijing has promised to buy more US agricultural goods, Bloomberg reported, without further details.
One former senior trade negotiator said the devil was in the details of the written agreement, which is still being worked out. "In trade negotiations, written text is important since that's where a lot of the lingering disagreements tend to resurface."
Mr Trump has signed off on the deal, and a White House announcement could come shortly, one source said.
In an attempt to secure a "Phase 1" trade deal, US negotiators earlier offered to cut existing tariffs on Chinese goods by as much as 50 per cent as well as suspend new tariffs that were scheduled to go into effect on Sunday, two people familiar with the negotiations said earlier on Thursday.
The US-China trade war has slowed global growth and dampened profits and investment for companies around the world. The United States has announced US$28 billion in subsidies for farmers who were impacted by the trade war.
China bought US$24 billion in US farm products in 2017, before the trade war started, according to US Department of Agriculture figures.
ELUSIVE PHASE 1 DEAL
Mr Trump said in a White House news conference on Oct 11 with Chinese Vice Premier Liu He that the two countries had agreed to a "Phase 1" trade deal on "intellectual property, financial services" and a "purchase of from US$40 (billion) to US$50 billion worth of agricultural products."
A written agreement would be available in weeks, Mr Trump said then, adding, "we've agreed in principle to just about everything I mentioned, all of the different points."
However, Beijing has balked at committing to buy a specific amount of agricultural goods during a certain time frame. Chinese officials said they would like the discretion to buy based on market conditions.
Officials from China have demanded the United States roll back tariffs that Mr Trump put in place as a condition of any "Phase 1" deal. The Trump administration put tariffs on hundreds of billions of dollars in Chinese imports, starting in July 2018.
If Mr Trump does not suspend the tariffs scheduled to go into effect on Dec 15, Beijing officials will apply more tariffs on US goods and may suspend talks until after the US presidential election in November 2020, trade experts believe.
The Dec 15 tariffs would apply to almost US$160 billion of Chinese imports such as video game consoles, computer monitors.
In August, China said it would impose 5 per cent and 10 per cent in additional tariffs on US$75 billion of US goods in two batches. Tariffs on the first batch kicked in on Sept 1, hitting U.S. goods including soybeans, pork, beef, chemicals and crude oil.
The tariffs on the second batch of products are due to be activated on Dec 15, affecting goods ranging from corn and wheat to small aircraft and rare earth magnets.
China also said it will reapply on Dec 15 an additional 25 per cent tariff on US-made vehicles and 5 per cent tariffs on auto parts that had been suspended at the beginning of 2019.