Hopes for a US-Chinese trade truce rose on Friday, though Beijing accused Washington of unfairly attacking its economy and said a settlement to the costly 17-month-old conflict must be “mutually beneficial”.
A senior Trump administration official said an announcement regarding China would be made on Friday.
A “deal is close”, said Myron Brilliant, the US Chamber of Commerce’s head of international affairs, who was briefed by both sides.
Mr Brilliant said the Trump administration had agreed to suspend a planned tariff increase on 160 billion dollars of Chinese imports due to take effect on Sunday and to reduce existing tariffs, though it was not clear by how much.
In return, Beijing would buy more US farm products, increase Americans companies’ access to the Chinese market, and tighten protection for intellectual property rights.
Getting VERY close to a BIG DEAL with China. They want it, and so do we!
— Donald J. Trump (@realDonaldTrump) December 12, 2019
The interim “Phase 1” deal, which does not appear to cover major US-Chinese disputes, is awaiting final approval from Donald Trump. The president did not comment to reporters on the talks when he returned to the White House late on Thursday.
He had declared on Twitter early on Thursday: “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”
Chinese officials gave no confirmation of a possible deal in comments that highlighted how far apart the two sides still are.
There is no indication the “Phase 1” agreement extends to major disputes including US complaints that Beijing steals or pressures companies to hand over technology.
“Negotiations must be based on the principles of equality and mutual respect,” said foreign ministry spokeswoman Hua Chunying, repeating Beijing’s long-held position. “The deal must be mutually beneficial, a win-win.”
Meanwhile, Foreign Minister Wang Yi complained at a separate government-organised forum in Beijing that Washington is unfairly attacking China.
“The US side has successively imposed unjustified restrictions and crackdowns on China in economy and trade, science and technology and personnel exchanges,” he said. “As far as China is concerned, what we are pursuing is our justified rights of development.”
Mr Trump’s comments triggered a rally on Wall Street that carried over to Asian trading.
The Dow Jones Industrial Average surged 220 points, or 0.8% on Thursday. In Friday trading, Japan’s Nikkei 225 index jumped 2.6%, while the Shanghai Composite index was up 1.5%.
Beijing has threatened to retaliate if Sunday’s tariff hike goes ahead.
Mr Trump announced the “Phase 1” agreement following talks in Washington in October but neither side has disclosed details.
Three Democratic senators – Minority Leader Charles Schumer of New York, Ron Wyden of Oregon, and Sherrod Brown of Ohio – sent a letter to the White House on Thursday, urging Mr Trump to “stand firm” in the negotiations with China.
They called on the president to hold out for “commitments from the Chinese government to enact substantive, enforceable and permanent structural reform”.
The administration accuses Beijing of cheating in its drive to develop advanced technologies as driverless cars and artificial intelligence.
The administration alleges – and independent analysts generally agree – that China steals technology, forces foreign companies to hand over trade secrets, unfairly subsidises its own firms and throws up bureaucratic hurdles for foreign rivals.
Beijing rejects the accusations and contends that Washington is simply trying to suppress a rising competitor in international trade.
Despite the plans for an announcement, it is not a done deal, noted Jeffrey Halley, of Oanda.
“After such an interminable wait and having been led to water before, I would like to see something official in writing officially. Further to that point, although the in-principle agreement may have been agreed, the legally binding text has yet to be drawn up,” he said.
Since July 2018, the Trump administration has imposed import taxes on 360 billion dollars worth of Chinese products. Beijing has retaliated by taxing 120 billion dollars in US exports, including soybeans and other farm products that are vital to many of Mr Trump’s supporters in rural America.
On Sunday, the administration was set to start taxing an additional 160 billion dollars in Chinese imports, a move that would extend the sanctions to just about everything China ships to the United States.
Repeated rounds of negotiations had failed to achieve even a preliminary agreement.
The prolonged uncertainty over Mr Trump’s trade policies has curtailed US business investment and probably held back economic growth. Many corporations have slowed or suspended investment plans until they know when, how or even whether the trade stand-off will end.
A far-reaching agreement on China’s technology policies is likely to prove difficult. It would require Beijing to scale back its drive to become a global powerhouse in industrial high technology, something it sees as a path to prosperity and international influence.
Efforts to acquire foreign technology are a theme that runs through Chinese law and government. Security researchers have asserted that Beijing operates a network of research institutes and business parks to turn stolen foreign technology into commercial products.
The Trump administration has been seeking a way to enforce any significant trade agreement with China, reflecting its contention that Beijing has violated past promises. One way to do is to retain some tariffs as leverage.