American and Chinese trade negotiators are working out details of a new agreement that could avert a wider trade war as the New Year approaches.
The Wall Street Journal reported that the deal could lead to a boost in U.S. exports to the Asian giant as well as a loosening of regulations that prevent or hamper U.S. firms from operating in China, people familiar with the negotiations said.
POTUS Donald Trump on Saturday tweeted that he and Chinese President Xi Jinping had made “great progress” in trade discussions, which are set to wrap up on March 1.
“Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas, and points of dispute,” he tweeted.
The WSJ noted further, however, that other people familiar with the talks say that the president could be overstating the progress. They said that POTUS is looking to calm jittery markets which have been declining in recent weeks, many say due to the Federal Reserve’s rate hikes.
The paper noted further:
If no deal is reached, U.S. tariffs on $200 billion of Chinese goods are due to increase to 25% from 10% on March 2, potentially having a big impact on electronics, furniture, machinery and other U.S. industries that rely on Chinese imports. It could also deepen a slowdown in China’s economy, which would have broad consequences for global growth.
A team of U.S. trade officials, including Deputy Trade Representative Jeffrey Gerrish and Treasury Undersecretary David Malpass is expected to travel to Beijing the week of Jan. 7 for several days of talks.
If progress is made, a Chinese delegation would follow up with a trip to Washington, D.C., later in the month.
The president’s trade team has already renegotiated a new NATFA-like trade agreement with Mexico and Canada. That agreement needs approval of the legislative bodies of all three countries before it takes effect.
POTUS has hinted that he may withdraw from NAFTA outright to force Democratic support for the new agreement, USMCA. — Jon Dougherty
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