The United States and China are nearing the conclusion of negotiations for a limited trade agreement, which reportedly could be signed by both countries as early as mid-November 2019. Both the United States and China initially planned to sign the agreement at the Asia-Pacific Economic Cooperation (“APEC”) meetings which were held in Chile on November 16 and 17. Although President Trump and President Xi both planned to attend the meeting, the meeting was cancelled by Chilean President Sebastian Pinera because of concerns about the significant protests and political unrest Chile has experienced since mid-October. As a result, some sources speculate, the signing of the trade deal will now be pushed to December 2019, with discussions about the location of the signing ceremony still going on.
The specific terms of the deal are largely unknown. Certain sources familiar with the ongoing negotiations indicate, however, that the initial agreement will be aimed at ending the more damaging aspects of the trade war between the United States and China. The Trump Administration has long complained of China’s provision of significant subsidies to state-owned firms and the forced transfer of American technology to Chinese firms as a condition of doing business in China, as well as other industrial policies that the United States considers unreasonable. Despite these longstanding concerns, some analysts indicate that the limited trade deal between the United States and China will likely fail to adequately address these issues. Instead, it is expected that China’s concessions will include increased purchases of U.S. agricultural products (including soybeans), an effort to stabilize China’s currency, the opening of Chinese financial services markets to American firms, and enhanced intellectual property protections in China.
In return for these concessions, Chinese negotiators are reportedly urging the Administration to withdraw certain of the new tariffs imposed on Chinese imports under section 301, including the duties imposed on approximately $110 billion in goods in September 2019. China’s negotiating team is also reportedly asking the Administration to reduce the 25% duty on approximately $250 billion of Chinese imports that were imposed in 2018. News outlets associated with Chinese State Media have stated that, for China, “removing all the additional tariffs is a core concern that has not changed and will never change; even if there is a first phase deal, this core concern should be reflected.”
On November 7, 2019, Gao Feng, a spokesperson of the Chinese Ministry of Commerce, publicly stated that negotiators have had “serious, constructive discussions” and that both China and the United States have agreed to roll back tariffs on each other’s goods in phases as they work toward a final agreement. These terms, however, have not yet been confirmed by the Trump Administration.
