The US will suspend its next tariff hike on Chinese imports, yet challenges to a broader trade deal persist.
US President Donald Trump announced his negotiating team had reached a “phase one deal” that includes agricultural products, financial services, and technology theft following two day of trade talks in Washington.
China has also stated that the current talks represent progress after months of stalemate.
“We’ve come to a deal, pretty much, subject to getting it written,” Mr Trump said, suspending a plan to raise tariffs on some Chinese goods to 30% and adding that the deal could be signed alongside Chinese President Xi Jinping at a UN summit in Chile in December.
US share markets, which had risen on reports of the deal, nevertheless shed some gains in the final minutes of trade as it became clear that any agreement would be relatively limited in its scope.
While the news was positive, the US government has claimed progress in the past on issues such as increased agricultural purchases and currency, only for the dispute to continue unresolved.
Notably, the country’s top trade negotiator, Robert Lighthizer, said that another planned tariff hike, for December, remains on the table.
“While we are pleased that tariffs aren’t going up, this agreement seemingly does nothing to address the crippling tariffs farmers currently face,” Brian Kuehl, co-executive director of lobby group Farmers for Free Trade, told the BBC regarding Trump’s promise of agricultural purchases by China increasing to between $40bn and $50bn as a result of the deal.
“From the very beginning of the trade war, farmers have been promised that their patience would be rewarded,” Kuehl added. “To date, the deal they’ve been promised has not come.”
A broad range of issues
The US and China have placed tariffs on billions of dollars worth of each other’s goods over the past fifteen months, negatively impacting both their own economies and the global landscape more generally.
Among the US demands are reduced industrial subsidies by the Chinese government, improved access to markets for US companies, better protection for intellectual property rights, and a stop to both cyber theft and the forced transfer of technology to Chinese firms.
The talks took place against a tense backdrop following the US blacklisting of 28 Chinese private and government entities over concerns for human rights violations.
US business groups, which have largely opposed the tariffs, told various media outlets they hoped the breakthrough would set the stage for a broader trade deal that would remove the import tax hikes already imposed.
Nevertheless, President Trump has suggested that the wide range of issues on the table warrants breaking up the negotiations into smaller parts.
“It’s going to be such a big deal that doing it in sections and phases I think is really better,” he said.