Daily Management Review

Tariffs To Be Rolled Back If ‘Phase One’ Trade Deal Goes Through, Say China And US


Tariffs To Be Rolled Back If ‘Phase One’ Trade Deal Goes Through, Say China And US
If the "phase one" of a trade deal between China and the United States is completed both the sides will also include in it an agreement to roll back the tariffs that both sides imposed on each other’s goods, said officials from both the countries. Reports however suggested that this decision by the US administration has resulted in a split among some of the advisers of US president Donald Trump.
The two countries had agreed to cancel the tariffs in phases, said a spokesperson of the Chinese commerce ministry but did not elaborate on any timetable for the same.
The agreement for the rollback of tariffs was confirmed to the media by a US official according to reports that did not name the official, who also confirmed that the phasing out of some of the tariffs by both the sides would be a part of the first phase of a trade agreement that is still being finalized and penned down for signing by Trump and Chinese President Xi Jinping.
The United States is "very, very optimistic" about making a trade deal final so that the 60 month old trade war between the two largest economies of the world can be diffused, said White House spokeswoman Stephanie Grisham during an interview to Fox News Channel. "I cannot get ahead of the talks with China, but we are very, very optimistic that we will reach a deal soon," she said.
Experts warn the pact could still fall apart. The outlines of the ‘phase one’ deal was first announced by Trump last month and al to of work still had to be done when that announcement was made.
The protracted trade war, which started off by Trump imposing tariffs on Chinese goods last year, was aimed to reduce the huge trade deficit that the US has with China and since then both the countries have imposed tit for tat tariffs on each other’s goods worth billions of dollars. According to reports, since the tariffs has been used as a weapon by Washington to force Beijing onto the negotiating table, therefore the agreement to roll back the tariffs even in phases has drawn opposition from some advisers to Trump as they argue that this would result in the US giving up a key leveraging point.
The gains made by US stocks lost out on the gains after a report by Reuters that there was internal opposition to the plan for a phasing out of tariffs.
"There is no specific agreement for a phased rollback of the tariffs," said Michael Pillsbury, an outside adviser to Trump. "The American side has been ambiguous when and which tariffs will be lifted. The Chinese have some wishful thinking and are trying to soothe their domestic hardliners that the tariffs will someday come off."
Chinese Commerce Ministry spokesman Gao Feng said that an important condition for any agreement on trade was the cancellation of tariffs. "Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations," Gao told a regular briefing.