China and the United States are expected to reach an interim trade deal in Washington next month, with Beijing agreeing to buy more American farm products and the Trump administration postponing further tariff increases and easing restrictions on Chinese telecommunications company Huawei, a researcher affiliated with the Chinese government said.
A Chinese delegation led by vice finance minister Liao Min left Beijing for Washington on Tuesday to set out China’s agenda for the high-level talks that are set to take place in October that will involve key trade negotiators Vice-Premier Liu He, US trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.
China’s interest in buying US agricultural products will be supported by a personal visit by a member of China’s negotiating team to Midwestern farm states next week.
The senior official from China’s Ministry of Agriculture will visit US farmers in Nebraska and Montana, a source with knowledge of the trip told the South China Morning Post, without going as far as naming the official.
However, it is unknown whether the trip is intended to finalise the details of Chinese purchases of US farm products, the source added.
But for a deal to be agreed next month, the US might have to postpone proposed tariff increases beyond October 15, according to Chen Wenling, the chief economist for the China Centre for International Economic Exchanges.
“The US should rescind its tariffs, and in particular, it shouldn’t impose any new tariffs, that’s definitely the bottom line of Beijing,” Chen said.
US President Donald Trump has already delayed a planned increase in tariffs from 25 per cent to 30 per cent on US$250 billion of Chinese goods at the request of Vice-Premier Liu to avoid escalating trade tensions ahead China’s National Day on October 1, which is also the 70th anniversary of the founding of the People’s Republic of China.
A further delay, added Chen, would also help the US because further tariffs on US$300 billion of Chinese imports, including consumer goods, due to take effect on December 15 could also make some Christmas gifts more expensive, she said.
The US should rescind its tariffs, and in particular, it shouldn’t impose any new tariffs, that’s definitely the bottom line of Beijing
Chen added that it is “not necessary” for Beijing to make any significant concessions other than promises to buy US farm products, including soybeans and pork, because it has now gained the upper hand in fighting the trade war with the US.
Reports from Washington suggest that the US are demanding assurances on intellectual property protection as part of any interim trade deal, although it is unclear whether China will meet the demands.
“It would be very difficult to reach a comprehensive deal, anyway,” she said.
Trump earlier warned Beijing to make a trade war deal before the American presidential election next year because otherwise the deal will be much tougher on China.
Trump is likely to win the election, and it would a good news for China. He is completely clueless in fighting the trade war without any strategies or master plans, and he has bullied US allies
“I think there’ll be a deal maybe soon, maybe before the election, or one day after the election. And if it’s after the election, it’ll be a deal like you’ve never seen, it’ll be the greatest deal ever and China knows that,” Trump told reporters aboard Air Force One, according to Politico.
“If it’s after the election, it’ll be the toughest deal anybody’s ever had to make from the standpoint of China, and they know that. China knows that.”
Chen, however, said China would not wait for the presidential election result before making a deal, adding that Beijing would be happy to see Trump elected for a second four-year term.
“Trump is likely to win the election, and it would a good news for China,” she added. “He is completely clueless in fighting the trade war without any strategies or master plans, and he has bullied US allies.”
More from South China Morning Post:
- Donald Trump warns China faces ‘toughest trade war deal ever’ if they wait until after US election
- Trade war alone did not cause the slump in Asia’s export hubs, but Donald Trump ‘blocking’ recovery
- China corn industry also hit by African swine fever as demand for pig feed drops
- China economic slowdown sparks debate over what caused the slump, and how Beijing should intervene
- China to exempt US pork and soybeans from additional trade war duties, in response to Trump’s tariff delay
This article China, US close to agreeing interim trade war deal, Beijing expert predicts first appeared on South China Morning Post