U.S., China Reportedly Close To Trade Deal

Thursday, 07 Mar, 2019

Asian stocks rose Monday after news reports said Washington and Beijing are close to reaching an agreement as early as this month to end their costly tariff war.

Trump has made the trade deficit a focus of his economic foreign policy and frequently mentions it when discussing global trade. They also found the initial cost of Trump's duties to the USA economy was in the billions and being borne largely by American consumers.

Despite Washington imposing tariffs on $US250 billion worth of Chinese goods, the goods deficit with China rose to all-time high previous year.

Trump's economic team has told him an agreement will unleash a market rally, the people said.

Cars: China is "speeding up the timetable for removing foreign-ownership limitations on car ventures and reducing tariffs on imported vehicles to below the current auto tariff of 15%".

On its face, the mechanism looks similar to previous negotiating efforts the USA and China used to discuss trade issues - and that the Trump administration said it would abandon because they haven't been successful in getting Beijing to make the required changes to its trade policies.

The US is now locked in a trade battle with China over what it claims are unfair trade practices, resulting in tit-for-tat tariff increases on each others' goods.

Moreover, his attacks and threats to impose tariffs on trading partners from China to the European Union has also contributed to the slowdown in those economies and therefore their demand for American goods. To his mind that means the U.S.'s trade balance is worse than even the official data reflects.

Significantly, the analysis of import price data by Mary Amiti, Stephen Redding and David Weinstein also found that nearly all of the cost of the tariffs was being paid by USA consumers and companies.

Robert Lighthizer, who is the US trade representative, has been speaking on behalf of the USA against the officials in China. If the tariffs continue, about US$165 billion worth of trade would be redirected each year, they added.

"I've supported the view that we should try to focus the [current] negotiations on opening up more Chinese markets", Dollar said. "It's pretty unclear that this trade war is a net win for the economy at this point".

It had been set to take effect Mar 1, but now the rate will remain at 10%, according to a statement from the US Trade Representative's office. After the US imposed tariffs on global imports of steel and aluminum, China slapped retaliatory tariffs on a number of American goods. Trump called the request "very important for our great farmers".

Following a spat between the United States and the EU when America lifted tariffs on steel and aluminium, Mr Trump and European Commission President Jean-Claude Juncker past year reached a truce. If the tariffs led to the creation of 35,000 new manufacturing jobs - equal to all the steel and aluminum jobs lost in the past decade - they would cost US$195,000 per job, the study found.