President Trump reportedly reached a deal Thursday with Beijing to avoid new tariffs it was set to impose on Sunday and roll back some existing tariffs. The agreement indicates that the White House believes it is making progress in broader trade talks with China.
The White House agreed to scrap new 15% tariffs covering $156 billion worth of Chinese goods and also cut existing tariffs on Chinese goods, according to the Wall Street Journal. In exchange, Beijing will reportedly increase purchases of U.S. farm goods. The Washington Post reported that Trump was expected to formalize the agreement later on Thursday.
The White House and Beijing are currently engaged in talks to complete “phase one” of a trade agreement announced on Oct. 11. The deal has progressed slowly, with both sides arguing over how the terms would be committed to writing and whether the administration would remove some of the tariffs it has imposed.
Beijing has contended the White House rolling back some of its tariffs on Chinese goods was a key condition for maintaining trade talks. Trump has held that keeping tariffs in place and potentially adding more was necessary to ensure that China abided by the terms of any deal.
News of a deal was rumored throughout Thursday. “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” Trump tweeted in the morning.
“Trade teams from both sides are maintaining close communications,” Chinese Commerce Ministry spokesman Gao Feng told reporters Thursday.
Whether the administration went ahead with new tariffs on $156 billion worth of goods on Dec. 15 was expected to be an indicator of the status of the talks over the Oct. 11 deal and whether the administration would escalate its various trade wars in 2020. Thursday’s deal follows an agreement with congressional Democrats that ensures passage of the U.S.-Mexico-Canada Agreement on trade, another top White House priority.
Beijing had threatened to go ahead with an additional 25% tariff on U.S. autos and 5% tariffs on auto parts on the same day.
The Trump administration currently has 25% tariffs on $250 billion worth of Chinese goods and 15% tariffs on another $300 billion worth of goods. China has retaliated by placing tariffs on $185 billion worth of U.S. goods.
Trump has repeatedly stated that a complete trade deal with Beijing may have to wait until late next year.
