China Open to Partial Trade Deal If Trump Removes Tariff Threats





(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

China is still open to reaching a partial trade deal with the U.S., an official with direct knowledge of the talks said, signaling that Beijing is focused on limiting the damage to the world's second-largest economy.

Negotiators heading to Washington for talks starting Thursday aren't optimistic about securing a broad agreement that would end the trade war between the two nations for good, said the official, who asked not to be named as the discussions are private.

But China would accept a limited deal as long as no more tariffs are imposed by President Donald Trump, including two rounds of higher duties set to take effect this month and in December, the official said. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.

S&P 500 futures rose 0.9% on the news and the offshore yuan extended gains. Separately, the Financial Times reported that China is offering to increase purchases of American soybeans to 30 million tons annually from 20 million presently, citing people briefed on the talks.

The Ministry of Commerce didn't immediately reply to faxed questions.The latest round of trade talks come just days after the White House announced the blacklisting of Chinese technology firms over their alleged role in oppression in the far west region of Xinjiang, as well as visa bans on officials linked to the mass detention of Muslims. At the same time a fight over free speech between China and the National Basketball Association, triggered by a tweet backing Hong Kong's protesters, showed the widening gap between the countries.

"There might be big breakthrough in the coming trade talks as both sides have expressed good gestures and positive signals," said Huo Jianguo, a former Chinese commerce ministry official who is now vice chairman of the China Society For World Trade Organization Studies. "The recent blacklist and sanctions from the U.S. is just another usual tactic to showcase that it has multiple tools in the trade negotiations in line with Trump's maximum pressure policy. It is hardly surprising to us and we shouldn't take it too seriously."

Bloomberg News reported last month that the Trump administration has discussed offering a limited deal that would delay or even roll back some U.S. tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases. Questions about the strength of the U.S. economy have lingered before Trump faces an election next year.

President Xi Jinping's government is under pressure to stem the broadening conflict as the trade war adds to the downward forces on China's slowing economy. At the same time, China has resisted changes to its own industrial and economic policies that could potentially weaken the Communist Party's grip on the economy.

The trade talks have failed to make serious headway since negotiations collapsed in early May. Since then, China has ramped up its nationalist rhetoric as the U.S. has targeted national champions like Huawei Technologies Co.

The reaction of the Chinese state this week after an NBA team manager tweeted support of protesters in Hong Kong is a case in point, with broadcasters refusing to broadcast games watched by millions. China also vowed to retaliate after the U.S. took action against companies and officials it said were involved in oppressing Muslims in Xinjiang.

"The rising nationalism sentiment at home is creating hurdles for President Xi to make concessions in the upcoming trade talks with the U.S. in light of the NBA firestorm and Xinjiang sanctions," said Suisheng Zhao, executive director of the Center for China-U.S. Cooperation at the University of Denver's Graduate School of International Studies. "Even if China is willing to make some compromise, that space is limited."

(Updates with chart after second paragraph. The reference to a Financial Times story was corrected in a previous version of this story.)

--With assistance from Dandan Li and Kevin Hamlin.

To contact Bloomberg News staff for this story: Steven Yang in Beijing at kyang74@bloomberg.net

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, ;Jeffrey Black at jblack25@bloomberg.net, James Mayger

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

COMMENTS

More Related News

Trump impeachment trial resumes with McConnell proposing rules for debate
Trump impeachment trial resumes with McConnell proposing rules for debate

"This is the fair road map for our trial," McConnell said. "The eyes are on the Senate. The country is waiting to see if we can rise to the occasion."

Trump Did
Trump Did 'Nothing Wrong,' Lawyer Says: Impeachment Update

(Bloomberg) -- Donald Trump's impeachment trial began Tuesday, making him the third president in U.S. history to face possible removal from office by the Senate. He is charged with abusing his office and obstructing the House investigation of his actions.Here are the latest developments:McConnell Tweaks Rules on Trial Length (1:31 p.m.)A Senate Republican leadership aide said McConnell made a last-minute change to his resolution and it now will allow three days for the defense and impeachment managers to make their 24 hours of arguments, not two.Trump Trial Opens in Senate With Rule Debate (1:18 p.m.)The Senate formally opened Trump's trial, the third presidential impeachment trial in...

Iran MP offers reward for killing Trump, U.S. calls it
Iran MP offers reward for killing Trump, U.S. calls it 'ridiculous'

An Iranian lawmaker offered a $3 million reward to anyone who killed U.S. President Donald Trump and said Iran could avoid threats if it had nuclear arms, ISNA news agency reported on Tuesday amid Tehran's latest standoff with Washington. U.S. disarmament ambassador Robert Wood dismissed the reward

Donald Trump
Donald Trump's lawyers say impeachment case is insufficient, unconstitutional

Trump's new legal team says the two impeachment articles against him do not allege any high crime or misdemeanor as required by the Constitution.

Barron Trump is really tall, and people are joking he could be a future NBA star
Barron Trump is really tall, and people are joking he could be a future NBA star

The 13-year-old was pictured towering over his six feet, three inch father as he boarded Marine One on Friday.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy