The United States and China are nearing a trade deal that would roll back a portion of the $250 billion in US tariffs on Chinese goods, Reuters reported citing Politico on Wednesday after US Treasury Secretary Steven Mnuchin said the two countries completed “productive” talks in Beijing.
Mnuchin, along with US Trade Representative Robert Lighthizer, held a day of discussions with Chinese Vice Premier Liu He, aimed at ending a trade war. The talks are to resume next week in Washington, where some observers say a deal announcement is possible.
“Ambassador Lighthizer and I just concluded productive meetings with China’s Vice Premier Liu He. We will continue our talks in Washington, D.C. next week,” Mnuchin wrote on his Twitter account. He gave no details.
The three appeared before cameras at the end of talks at a state guest house in Beijing, chatting amiably among themselves without speaking to reporters.
“The discussions remain focused toward making substantial progress on important structural issues and rebalancing the U.S.-China trade relationship,” White House Press Secretary Sarah Sanders told pool reporters, adding only scheduling details.
Unilateral action
Politico quoted two people close to the talks as saying the sides have reached an understanding on how to enforce the agreement, but details need to be worked out. It would track closely to a framework described by Lighthizer to members of Congress: a series of meetings to address complaints about China’s compliance with the accord, ending in unilateral US tariff actions if the dispute cannot be resolved.
A USTR spokesman declined to comment on the Politico story.
Lighthizer has insisted on a strong enforcement mechanism to hold China to any promises to address US demands for reforms of Beijing’s policies governing intellectual property rights, technology transfers and cyber-theft of trade secrets.
In written replies to questions on the Senate Finance Committee website on Wednesday, Lighthizer said: “To the extent that there are issues that cannot be resolved at the vice-premier level, then the United States would have the right to act unilaterally to enforce. This mechanism I described did not exist in past dialogues.”
Tariff removal outline
A deal would involve immediate removal of 10 per cent tariffs on a portion of $200 billion in Chinese goods affected by that duty, with a phased removal of tariffs on remaining goods “quickly,” Politico said.
The United States has imposed tariffs on about $250 billion in Chinese goods, with a 25 per cent duty on $50 billion worth of machinery, semiconductors, electronic and industrial components and autos.
US officials have said privately that an enforcement mechanism for a deal and timelines for lifting tariffs are sticking points.
China’s official Xinhua news agency, in a brief report, noted that the latest talks had taken place and said the next rounds would take place in Washington next week as planned.
Beijing and Washington have cited progress on issues including intellectual property and forced technology transfer to help end a conflict marked by tit-for-tat tariffs that have cost both sides billions of dollars, disrupted supply chains and roiled financial markets.
Chinese officials have acknowledged that they view the enforcement mechanism as crucial, but said it must work two ways and cannot put restraints only on China.
In Washington, people familiar with the talks say the question of how and when any US tariffs on $250 billion worth of Chinese goods will be removed will probably be among the last issues to be resolved. US President Donald Trump has said he may keep some tariffs on Chinese goods for a “substantial period”.
The United States has also been pressing China to further open its market to US firms. China has repeatedly pledged to continue reforms and make it easier for foreign companies to operate in the country.
In comments published on Wednesday, China’s top banking and insurance regulator said the government would further open up its banking and insurance sectors.