The U.S. and China are close to a trade deal that could lift most or all U.S. tariffs as long as Beijing follows through on pledges ranging from better protecting intellectual-property rights to buying a significant amount of American products, two people familiar with the discussions said.
Chinese officials made clear in a series of negotiations with the U.S. in recent weeks that removing levies on $200 billion of Chinese goods quickly was necessary to finalize any deal, said the people, who weren’t authorized to talk publicly about the deliberations. That’s the amount the Trump administration imposed after China retaliated against the U.S.’s first salvo of $50 billion in tariffs that kicked off the eight-month trade war.
One of the remaining sticking points is whether the tariffs would be lifted immediately or over a period of time to allow the U.S. to monitor whether China is meeting its obligations, the people said. The U.S. wants to continue to wield the threat of tariffs as leverage to ensure China won’t renege on the deal, and only lift the duties fully when Beijing implemented all parts of the agreement.
Stocks in Europe and Asia advanced on optimism about a deal, with the Stoxx Europe 600 Index rising 0.4 percent. The offshore yuan gained 0.2 percent.
Dates for a summit between President Donald Trump and counterpart Xi Jinping have yet to be agreed, according to officials from both countries who declined to be named. The Wall Street Journal, which reported earlier that the U.S. and China were close to finalizing a trade pact, reported the summit could happen around March 27.
Plans for a signing ceremony have been complicated by Xi’s need to lead China’s annual National People’s Congress and to make other foreign trips.
U.S. and Chinese officials “have conducted fruitful and intensive consultations and made important progress on many issues of common concern,” Zhang Yesui, a spokesman for the National People’s Congress, the annual session of China’s legislature, told reporters in Beijing on Monday. “We hope that the two sides will continue to hold consultations and reach a mutually beneficial and win-win agreement,” he added.
China is offering to lower tariffs on U.S. farm, chemical, auto and other products, the Journal said, citing people familiar with the situation. Specifically, China would buy $18 billion in natural gas from Houston-based Cheniere Energy Inc., one of the people familiar with the matter said.
As part of a deal, China is pledging to speed up the timetable for removing foreign-ownership limitations on auto ventures, and to reduce tariffs on imported vehicles to below the current rate of 15 percent, the newspaper reported.
A senior administration official cautioned on Sunday that a decision had not yet been made over lifting the U.S tariffs. The official also said a debate was continuing inside the administration with Trump unlikely to make a decision before a deal was closer to being done, likening to situation to the debate over what to do with U.S. sanctions in the lead-up to last week’s summit with North Korea’s Kim Jong Un.
Asked during a congressional hearing last week whether a deal would see a lifting of U.S. tariffs, Robert Lighthizer, the China hawk now leading the talks with Beijing, would say only that was China’s desire.
HMRC is also reminding businesses to get an Economic Operator Registration and Identification (EORI) number if they do not already have one. This number is crucial to be able to trade after we leave the EU (if we leave without a deal). It’s free and takes just 10 minutes to register online.
TSP will remain in place for more than a year to give businesses time to prepare to use the full customs processes that already apply to imports from non-EU countries.
The policy will be reviewed within 3 to 6 months after it’s introduced on 29 March 2019 to see how it’s working.
HMRC will consult with businesses and give them at least a 12-month notice period before withdrawing the easements in TSP and applying the usual customs processes to imports from the EU. This will give businesses enough time to prepare.
Read the full guidance on registering for simplified import procedures if the UK leaves the EU without a deal.