Chinese officials expect the US will delay a threatened tariff increase set for 15 December 2019 as both sides focus on de-escalating tensions by cutting import taxes currently in place rather than removing specific products from the target list, reported Bloomberg.
While the Trump administration has yet to announce any postponement, US Agriculture Secretary said that he believed there will be some backing away.
Reducing the existing tariff rates will enable negotiators to avoid having to choose which among thousands of goods can receive relief. The US has added a 25 per cent duty on about $250 billion of Chinese products and a 15 per cent levy on another $110 billion of its imports over the course of a 20-month trade war.
The ongoing discussions illustrate the difficulties in reaching an accord that President Donald Trump said more than eight weeks ago was basically done and would take three to five weeks to put on paper.
Wilbur Ross, the US Commerce Secretary, said that getting the right deal is more important than whether it comes before or after 15 December 2019, adding that every day that goes by, we are in a better negotiating position.
Ross added that most of the tougher issues will be addressed in later phases of negotiations.
Adding to the tough timeline for the phase-one deal by 15 December 2019 is US Trade Representative Robert Lighthizer’s attention this week on getting enough support in Congress to ratify the administration’s revamped free-trade agreement with Mexico and Canada.
A tariff reprieve would lift confidence in the global economy and signal that the two sides are determined to push through a deal, despite heightened tension in the past two weeks over non-trade conflicts including the US stance on Hong Kong’s protests and alleged abuses in China’s Xinjiang province.
As China continues to increase agricultural purchases from the US, officials are also still wrangling over the provisions for future buying in the agreement.
The US wants to lock China in a firm schedule of purchases. China insists that any buying commitments should not conflict with its obligations under World Trade Organisation rules.