China reportedly wants rollback of US tariffs in Phase 1 trade deal

BEIJING • Beijing is insisting that United States tariffs must be rolled back as part of any Phase 1 trade deal with Washington, China's Global Times newspaper said yesterday, citing unnamed sources, amid continued uncertainty on whether the two sides can strike a deal.

"A US pledge to scrap tariffs scheduled for Dec 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 the signing of a Phase 1 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 last month.

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".

The trade war has caused all sorts of problems, not just because of the higher tariffs themselves, but also because of adjustments 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 will be able to get back to where we were before," professor of international economics and public policy Alan Deardorff of the University of Michigan Ford School of Public Policy said in a recent interview with Xinhua.

"It is very much in the interests of almost everybody in both countries to reverse this whole process," said Prof Deardorff.

In his eyes, the 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 have 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."


Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on December 02, 2019, with the headline China reportedly wants rollback of US tariffs in Phase 1 trade deal. Subscribe