US, China agree on ‘substantial’ deal in trade talks

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Washington and Beijing have agreed to a ‘substantial’ interim trade deal, averting a tariff increase on Chinese goods that had been planned for October 15 and auguring an export windfall for US farmers, President Donald Trump said.

New York Post reports, the president’s announcement came during a meeting with Chinese trade negotiators in the Oval Office.

“Lots of respect for President Xi,” Trump told reporters of China’s leader, Xi Jinping.

“We’ve had a tremendous negotiation, a very complex negotiation, but something that’s going to be great for both countries,” Trump said.

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Ultimately, the deal is “a great thing for world peace,” he said at the end of his meeting with Beijing’s lead trade envoy, Vice Premier Liu He.

“You know there was a lot of friction between the United States and China and now it’s a love fest.”

Although the details still need to be committed to paper over the next four weeks — and then signed by both countries — the “phase one” agreement so far represents key concessions from Beijing.

It requires that over the next two years, Chinese imports from US farms will grow to an annual rate of US$40 billion (A$59 billion) to $50 billion. That’s more than double the previous high-point of $16 to $17 billion. Currently annual US farm exports to China are at $8 billion, Trump said.

“I’d suggest the farmers have to immediately go and buy more land, and get bigger tractors,” the president joked.

He added, “I’m very excited for the farmer. There’s never been a deal of this magnitude for the American farmer.”

Liu also praised the accord.

“We very much agreed to get to the China-US economic relationship right. It is something good for China, for the United States and for the whole world,” he told reporters at the White House.

“We are making progress towards a positive direction.”


After more than a year of trench warfare, however, it remained unclear whether the countries could sustain the momentum needed to conclude subsequent “phases” of the deal.

Trump said he hoped to sign with Xi Jinping when they are both in Chile for the APEC leaders summit in mid-November.

However, some observers said the deal was underwhelming.

Greg Daco of Oxford Economics called it an “itsy-bitsy-teeny-weeny handshake deal.”

Though it lays the foundation for a broader accord later, “behind the hype, this is nothing more than partial and ostensibly unsustainable deal lacking in real enforcement mechanisms,” he said in an analysis.

“For businesses this will mean less damage, not greater certainty.”

The National Retail Federation said it was encouraged by the progress, adding, however: “Although this is a step in the right direction, the uncertainty continues.”

But even the incremental win could be a boon for Trump, who faces an impeachment firestorm and a stinging criticism in Congress for his treatment of Kurdish allies in Syria, only the latest episodes in the White House’s perpetual turmoil.


The US Treasury in August branded China a currency manipulator, accusing Beijing of deliberately weakening the yuan to gain unfair trade advantages.

Trump also said the deal would make some steps toward protecting American technology, a major focus of the trade frictions.

Since the China trade war began last year, moments of comity and cheer have more than once been shattered, giving way to jolting deteriorations in relations between the two sides.

China has so far balked at Trump’s demands for profound changes in the way Beijing manages its economy, which analysts say could politically undermine the Communist Party.

An agreement has also been struck concerning currency and China opening its market to American financial services firms, Treasury Secretary Steven Mnuchin said.

Intellectual property protections for US companies that do business with China have also been agreed upon.

“We have come to a deal on intellectual property,” Trump said.

The tentative deal averts a hike in tariffs from the current 25 per cent up to 30 per cent. The tariff will remain at 25 per cent, officials said.

Trump has not made a decision yet on new tariffs on an additional $160 billion of goods that had been set to take effect on December 15.

Advance hopes of a trade breakthrough had already resulted in a bump in stocks earlier this week.

Trump has previously imposed some $360 billion in tariffs on Chinese goods; China has imposed some $120 billion in counter-duties on US goods.

Parts of this article originally appeared in the New York Post and are republished here with permission.