The United States and China appeared close on Friday to a “phase one” deal to de-escalate a trade war that has caused tensions between the superpowers and threatened to wobble the global economy.
Reports Washington and Beijing had struck a bargain at last — subject to approval by US President Donald Trump — sent US stocks sailing to their first record closes of December.
“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” Trump tweeted in a markedly optimistic tone on Thursday.
A Chinese government notice said vice ministers of commerce, agriculture and finance, and senior economic officials would give a press briefing late Friday in Beijing on “relevant progress” in the US-China “trade consultation”.
There were no other details.
Earlier, foreign ministry spokeswoman Hua Chunying declined to confirm whether a deal had been struck.
“We always adhere to the principle that consultation must be based on equality and mutual respect, and the agreement must be mutually beneficial and a win-win solution,” Hua said at a regular briefing.
In a sign that tensions remain high between the two powers, Foreign Minister Wang Yi said Washington was “suppressing” China across a number of fields, including the economy, trade and technology.
Speaking at a symposium on international affairs in Beijing, Wang said the United States has “seriously damaged the foundation of hard-earned trust between China and the US.”
Washington has angered Beijing by backing Hong Kong’s pro-democracy movement and criticising China’s mass detention of mostly Muslim minorities in the northwest region of Xinjiang.
Trump’s flagging of a trade breakthrough comes ahead of new tariffs planned to take effect Sunday and also just as he is almost sure to become only the third US president to be impeached.
With his 2020 re-election battle heating up, Trump is keen to seize the political initiative and show voters his punishing struggle with China has brought results.
The US ultimately wants China to open its vast economy to more goods and to conduct sweeping reforms of what Washington has long called systemic abuse against foreign investors.
Recently though, White House officials have indicated they would settle for less in a so-called “phase one” deal.
The Washington Post reported that Trump had signed off on a swap of tariff reductions in return for China spending $50 billion on US farm goods, tightening its intellectual property protections and opening its financial services markets.
The paper cited Michael Pillsbury, a China expert at the Washington-based Hudson Institute it said had been briefed by Trump, and an unnamed senior administration official.
Plans for an official announcement had not been nailed down, the daily said, adding that the administration does not intend to seek congressional approval.
Dodging new tariffs bullet
In addition to existing tariffs, Trump had threatened to impose a 15 percent levy Sunday on around $160 billion of Chinese exports, including popular US consumer goods like electronics and clothing.
China had previously said it would respond with a 25 percent tariff on US autos and a five percent tariff on auto parts — levies that were suspended earlier this year as a goodwill gesture.
According to The Wall Street Journal, the US side is offering to scrap the threatened Sunday tariffs and also cut existing duties imposed on about $360 billion in Chinese goods.
Trump’s overall goal with China and a keystone of his presidency, is to uproot what Washington says are Beijing’s predatory trade practices, including forced technology transfers and massive intellectual property theft.
Trump himself has blown hot and cold, repeatedly insisting that China needs a deal more than the United States does.
At the end of November, he said he was in the “final throes” of negotiations, but days later he spooked world financial markets when he said “I have no deadline” for a resolution.
The intense talks, involving multiple meetings in Beijing and Washington, were further complicated by tensions over the pro-democracy uprising in Hong Kong.
Trump, somewhat reluctantly, signed a law passed with overwhelming congressional support in November that backs the Hong Kong demonstrators.
Beijing responded that the law was “abominable” and “sinister,” but ultimately appeared to have little in the way of counter-measures.