US, China Say Theyre Close to Finalizing Part of Phase One Trade Deal

WASHINGTON—U.S. and Chinese officials are “close to finalizing” some parts of a trade agreement after high-level telephone discussions, with talks to continue, the U.S. Trade Representatives office and Chinas Commerce Ministry said on Oct. 26.

The USTR provided no details on the areas of progress.

“They made headway on specific issues and the two sides are close to finalizing some sections of the agreement. Discussions will go on continuously at the deputy level, and the principals will have another call in the near future,” a USTR statement said.

Washington and Beijing are working to agree on the text for a “Phase One” trade agreement announced by U.S. President Donald Trump on Oct. 11. Trump has said he hopes to sign the deal with Chinese leader Xi Jinping next month at a summit in Chile.

In a separate statement posted on Chinas Ministry of Commerce website on Saturday morning, Beijing confirmed “technical consultations” on some parts of a trade agreement were basically completed.

Agricultural products are a major area of discussion.

Chinas commerce ministry said both sides confirmed the United States will import Chinese-made cooked poultry and catfish products, while China will lift a ban on U.S. poultry.

Beijing wants the United States to cancel some existing U.S. tariffs on Chinese imports, people briefed on the Friday call told Reuters, in return for pledging to step up its purchases of U.S. commodities like soybeans.

The United States wants Beijing to commit to buying these products at a specific time and price, while Chinese buyers would like the discretion to buy based on market conditions.

The worlds two largest economies are trying to calm a nearly 16-month trade war that is roiling financial markets, disrupting supply chains and slowing global economic growth.

“They want to make a deal very badly,” Trump told reporters at the White House on Friday. “Theyre going to be buying much more farm products than anybody thought possible.”

Trump agreed earlier this month to cancel an Oct. 15 increase in tariffs on $250 billion in Chinese goods as part of a tentative agreement on agricultural purchases, increased access to Chinas financial services markets, improved protections for intellectual property rights and a currency pact.

White House advisers are hoping to cement a binding, enforceable agreement with Beijing, including a pledge not to force U.S. companies to transfer technology to Chinese companies to do business there.

Tariffs Take the Lead

Beijing was expected to ask Washington during Fridays call to drop its plan to impose tariffs on $156 billion worth of Chinese goods, including cell phones, laptop computers, and toys, on Dec. 15, two U.S.-based sources told Reuters.

Beijing is also seeking the removal of 15% tariffs imposed on Sept. 1 on about $125 billion of Chinese goods, one of the sources said. Trump imposed the tariffs in August after a failed round of talks. “The Chinese want to get back to tariffs on just the original $250 billion in goods,” the source said.

In the decade before Trump took office, Chinas purchases of U.S. agriculture and related products tripled, reaching $25.2 billion in 2016. But they dropped to $13.2 billion in 2018, after the U.S. put tariffs on hundreds of billions of dollars of Chinese goods.

Derek Scissors, a resident scholar and China expert at the American Enterprise Institute in Washington, said the original goal of the early October talks was to finalize a text on intellectual property, agriculture and market access to pave the way for a postponement of the Dec. 15 tariffs.

Phase One will not cover U.S. allegations of Chinese hacking into U.S. companies and government agencies, state subsidies, Beijings alleged dumping of lower-priced products on global markets or Chinas involvement in the fentanyl market, one person briefed on the negotiations said.

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