China and USA to agree gradual withdrawal of duties

Friday, 08 Nov, 2019

China has raised hopes that a deal can be reached to end its trade war with the U.S. after agreeing with Washington to roll back some tariffs.

Gao added that in order to reach the "first phase" of the trade agreement, both sides will have to withdraw some tariff increases at the same time. "The question remains whether the White House would be prepared to ditch all tariffs in exchange for some vague commitments on agricultural products and IP and think it can sell that as a win to voters".

"There's nothing that Trump hates more" than someone backtracking on a deal, he said. "The currency could rally to 6.9 if the US confirms the news on the lift of tariffs".

U.S. Commerce Secretary Wilbur Ross said earlier this week that any Phase 1 agreement would be general and cover trade in specific areas such as soybeans and liquefied natural gas.

Beijing's signal that a "phase 1" trade deal with the United States was close to being sealed helped Europe's share markets hit a more than 4-year peak on Thursday and bond yields shuffled higher.

The U.S. and China have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

US consumers and businesses paid an additional 38 billion USA dollars in tariffs from February 2018 to September 2019 due to U.S.

The interim China trade deal was expected to cover a USA pledge to scrap tariffs coming up on December 15 binding $156 billion worth of Chinese imports, including cell phones, laptops, and China toys that are as much familiar as Toys R Us.

Overseas financial markets rose on the signs of progress on a trade deal, while USA stock futures pointing to a strong opening.

Most of the recent market optimism, however, has been fuelled by the increasing chance of a mini trade deal between the United States and China.

China and the US are working on a "Phase 1" trade agreement as they seek to ease the tariff war that has threatened world economic growth.

The proportion of tariffs cancelled must be the same, and how many tariffs should be cancelled can be negotiated, Gao told reporters.

But Chinese trade expert Huo Jianguo said the move was a vindication of Beijing's long-held position on the punitive tariffs.

Taiwan's third-largest export to the U.S.as a result of the trade war is electrical machinery at US$287 million, while the European Union led the pack in this sector with exports of US$422 million.