The United States and China agreed on the outlines of a partial trade accord on Friday that President Donald J. Trump said he and his counterpart Xi Jinping could sign as soon as next month.
As part of the deal, China would significantly step up purchases of US agricultural commodities, agree to certain intellectual-property measures and concessions related to financial services and currency, Trump said on Friday at the White House. In exchange, the US will delay a tariff increase due next week as the deal is finalized, though new levies scheduled for December haven’t yet been called off.
The agreement marks the largest breakthrough in the 18-month trade war that has hurt the economies of both nations. Important, Trump said the deal was the first phase of a broader agreement. The president indicated he could sign a deal with Xi at an upcoming November summit in Chile.
While the limited agreement may resolve some short-term issues, several of the thorniest disputes remain outstanding. US goals in the trade war center around accusations of intellectual-property theft, forced technology transfer and complaints about Chinese industrial subsidies.
Xi told Trump in a letter—which the White House distributed on Friday —that it’s important the countries work together to address each others’ concerns. “I hope the two sides will act in the principle and direction you and I have agreed to, and work to advance China-US relations based on coordination, cooperation and stability,” the letter said.
Chinese state news agency Xinhua said negotiators made efforts toward a final agreement, but stopped short of calling Friday’s outcome a deal. The editor in chief of China’s most prominent state-run newspaper Global Times, Hu Xijin, noted on Twitter that official reports from China didn’t mention Trump’s goal of signing the deal next month, which indicates Beijing wants to keep expectations low.
Phase two
The Trump administration also said issues related to Huawei Technologies Co. aren’t part of Friday’s deal and will be a separate process. The Chinese telecommunications equipment maker, which was placed on an export blacklist in May, will be discussed in a second phase of the negotiations, the president told reporters later on Friday.
Trump’s announcement drew a wary welcome from even Republicans on Capitol Hill.
“After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China,” Senate Finance Committee Chairman Chuck Grassley said in a statement after the announcement. “Farmers in Iowa know far too well that the trade war has caused real financial pain in the heartland. But we need to know more about this deal and follow-through from China will be key.”
On Thursday and earlier Friday, Liu He and US Trade Representative Robert Lighthizer held the first senior-level discussions between Washington and Beijing since a previous agreement fell apart in May and tariffs were raised in the months after.
“Past experience is that US–China trade agreements aren’t worth the paper they are written on, and this one hasn’t even been written down. For now, though, indications on trade are a little more positive. If that persists, it could help put a floor under sliding global growth,” said Bloomberg economists Tom Orlik and Yelena Shulyatyeva.
The US was threatening to increase tariffs on Tuesday on about $250 billion of Chinese imports to 30 percent from 25 percent. More duties on $160 billion of Chinese products were targeted for December 15.