Daily Management Review

U.S. And China Close To Finalizing A Trade Deal: The Wall Street Journal


03/05/2019




U.S. And China Close To Finalizing A Trade Deal: The Wall Street Journal
The promises to make some structural changes to its economic policies and the elimination of retaliatory tariffs on US goods has created the perception that deal on trade between the United States and China is close by which would result in roll back U.S. tariffs on at least $200 billion worth of Chinese goods, according to reports quoting sources with knowledge of the negotiations.
 
According to the claims in a report by the Wall Street Journal on Sunday, the progress made by the two countries on trade could well end up U.S. President Donald Trump and Chinese President Xi Jinping finalizing on a trade deal around March 27 at a possible summit.
 
Import tariffs on $250 billion worth of imports from China have been imposed by the US while China has imposed import tariffs on $110 billion worth of U.S. goods, which includes soybeans and other commodities, as a part of the eight-month trade war between the two countries. The trade war has shuddered by the financial markets, upended manufacturing supply chains and brought down exports of U.S. farm products.
 
According to the report quoting officials in the Trump administration, there are chances that the two leaders of the two countries would be able to seal a trade deal at a summit in coming weeks which is most likely to be held at Trump’s Mar-a-Lago estate in Florida.
 
No dates for a summit had been determined, the report said but a 10-day window from around March 20 for a possible summit has been reserved by Beijing.
 
The two countries still need to iron out many details of the agreement which includes the creation of a framework for enforcement to make sure the pledges to the changes to policies to better protect U.S. intellectual property made by Beijing are follows through, bring an end to forced transfer of technology in the name of joint venture with domestic companies and reducing industrial subsidies.
 
The report quoted another source stating that an agreement on most of the non-enforcement issues between the parties is close at hand, which includes promise of China to increase of imports of US farm, energy and manufactured products in addition to six agreements on structural policy changes.
 
The Wall Street Journal report also claimed that the pending agreement also includes lowering of Chinese tariffs on U.S.-made goods including agricultural products, chemicals and cars while the US in return would also provide relief on the sanctions on some of the Chinese imports.
 
The report also said the agreement also entailed China purchasing natural-gas from Houston-based Cheniere Energy Inc worth $18 billion.
 
According to comments made by S. Treasury Secretary Steven Mnuchin to CNBC on Thursday, specific structural commitments would be included in the detailed trade agreement that the United States is striving to hammer out with China.
 
If a trade deal was not good enough, the U.S. could shy away from a trade deal with China, said Trump last week. His economic advisors however quoted “fantastic” progress towards an agreement on trade between the two countries.
 
(Source:www.reuters.com)






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