China expects tariff delay ahead of interim deal

Business | Bloomberg 12 Dec 2019

Chinese officials expect US President Donald Trump to delay a threatened tariff increase set for Sunday, giving more time to negotiate an interim trade deal that both sides continue to insist is close to fruition despite a series of missed deadlines, according to people familiar with the discussions.

The two sides, staying in almost daily contact, have also come closer to an agreement on scaling back the tariffs already in place.

But rather than removing or rolling back existing levies, the focus has been on reducing the rate of the tariffs already in effect, according to officials and other people familiar with the talks.

The Trump administration has so far not sent a clear signal on its willingness to agree to a delay on tariffs set to take effect on December 15 on a list comprising some US$160 billion (HK$1.24 trillion) of imports from China including consumer items like smartphones and toys.

"It's the president's decision," White House Trade Adviser Peter Navarro said late Tuesday.

"I've got no indication that he's going to do anything other than have a great deal or put the tariffs on."

That came a day after US Agriculture Secretary Sonny Perdue said that he believed there would be "some backing away" from the new wave of levies. People familiar with the discussions say Trump was expected to meet with his trade team on Thursday as discussions continue over a potential delay.

The United States has added a 25 percent duty on about US$250 billion of Chinese products and a 15 percent levy on another US$110 billion of its imports over the course of a 20-month trade war. Discussions now are focused on reducing those rates by as much as half as part of a phase one agreement that would relax tensions and pave the way for further talks.

Beijing sees delaying that increase on imported consumer goods as allowing the talks to continue on the unfinished items in phase-one of the accord, two officials said on condition on anonymity because the conversations are private.

US Commerce Secretary Wilbur Ross told the Fox Business Network on Tuesday that getting the right deal was more important than whether it came before or after December 15. "Every day that goes by, we are in a better negotiating position," he said, adding that most of the tougher issues would be addressed in later phases of negotiations.

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