China wants rollback of tariffs in phase one trade deal with US: Global Times

China's Global Times newspaper says that Beijing is insisting that a rollback of tariffs must be part of any phase one trade deal with Washington.
China's Global Times newspaper says that Beijing is insisting that a rollback of tariffs must be part of any phase one trade deal with Washington. PHOTO: AFP

BEIJING (REUTERS, XINHUA) - Beijing is insisting that United States tariffs must be rolled back as part of any phase one trade deal with Washington, China’s Global Times newspaper said on Sunday (Dec 1), citing unnamed sources, amid continued uncertainty on whether the two sides can strike a deal.

“A US pledge to scrap tariffs scheduled for December 15 cannot replace the rollbacks of tariffs,” the newspaper said in a tweet, referring to an additional round of tariffs on Chinese imports to be implemented in the absence of a trade deal.

The Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party.

Last Tuesday, US President Donald Trump said Washington was in the “final throes” of a deal aimed at defusing a 16-month trade war with China, a few days after Chinese President Xi Jinping expressed his desire for a trade agreement.

Top trade negotiators for both countries also spoke again and agreed to continue working on the remaining issues.

Trade experts and people close to the White House told Reuters last month, however, that signing of a phase one agreement may not take place until the new year, as China pressed for more extensive rollbacks of tariffs. An agreement was initially expected to be completed by the end of November.

US Senate Finance Committee Chairman Chuck Grassley told reporters last Tuesday that Beijing invited US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for in-person talks in Beijing.

Mr Grassley said Mr Lighthizer and Mr Mnuchin were willing to go if they saw “a real chance of getting a final agreement”.

A source familiar with the trade talks also told Reuters that US officials could travel to China after last Thursday’s Thanksgiving holiday in the US.

TARIFF ROLLBACK A WIN-WIN

Trade war has caused all sorts of problems, not just because of the higher tariffs themselves, but also because of adjustments the markets have to make in response to the tariffs, said a US economist.

“The sooner we can take off those tariffs, the better, (because) some of those adjustments won’t have to be undertaken, and we’ll be able to get back to where we were before,” said professor of international economics and public policy Alan Deardorff at the University of Michigan Ford School of Public Policy, in a recent interview with Xinhua.

“It’s very much in the interests of almost everybody in both countries to reverse this whole process,” said Prof Deardorff.

He holds that China and the United States were in a pretty good place in terms of trade before the US initiated escalating tariff measures against China.

“We benefit tremendously from trade with China,” he said, adding that the productivity of China has led to the expansion of its exports, the speed of which is “far more than anybody thought it would be”, since China is making “really good stuff that we are all benefiting from”.

In Prof Deardorff’s eyes, US trade imbalance is in part a result of the large US trade deficit with “everybody, not just China”, and “our spending far, far more than our income, which we’ve been doing for years, and increasingly so in recent years”.

Meanwhile, China “has a lot to sell, and is spending less than its income", he said. “It then becomes an imbalance with China.”