Vice-Premier Liu He is set to lead a delegation to Washington this Saturday, where he is expected to sign a phase one deal that would significantly de-escalate the US-China trade war, a source briefed on the matter has told the South China Morning Post.
“Washington has sent an invitation and Beijing has accepted it,” said the source, who declined to be named due to the highly sensitive nature of the information. The Chinese delegation is expected to stay “a few days” in the US until the middle of next week, the source added.
Neither side has officially confirmed the trip. China’s Ministry of Commerce was not immediately available for comment.
The signing of a phase one deal during Liu’s trip would mark a point of truce in the bitter trade war between the world’s two biggest economies, one that is expected to boost global markets and brighten increasingly gloomy outlooks for economic growth.
In addition, it could help to ease bilateral tensions between China and the US, which in recent months have grown more fraught, as US lawmakers moved to implement human rights and democracy legislation related to Hong Kong and Xinjiang.
US President Donald Trump said before Christmas that he would “ultimately” have a signing ceremony with President Xi Jinping.
“We will be having a signing ceremony, yes,” Trump told reporters. “We will ultimately, yes, when we get together,” he told reporters in Florida.
US trade representative (USTR) Robert Lighthizer said on December 13 that officials from both countries would sign the phase one trade deal “in the first week of January”.
The Chinese side has never confirmed the date of the signing, and there appears to be no indication that Trump and Xi will meet in the coming weeks.
Cui Tiankai, China’s ambassador to the United States, said in an interview with state broadcaster CGTN last weekend that Beijing will live up to its trade deal commitments. “I think we have full confidence in our negotiators. So let the two teams do their job,” Cui said. “And still they are under the guidance of the two presidents.”
China and the US announced an interim deal on December 13 after more than a dozen rounds of on-off negotiations. The development led to both sides cancelling planned new tariffs due to come into effect on December 15. The US also reduced one batch of existing tariffs from 15 per cent to 7.5 per cent.
It is thought that as part of the agreement, China will make a huge purchase of US farm goods, as well as significant purchases of other American products.
China has remained tight-lipped on the details, with state media only confirming that a deal had been agreed in principle, but that the text needed to be translated, proofread and legally scrubbed.
The Office of the USTR, on the other hand, released a comprehensive fact-sheet outlining what it claimed to be in the deal. Lighthizer also took to US airwaves – in a rare media appearance – to discuss the contents of the phase one agreement.
Along with improvements in intellectual property rights protection and opening of financial markets, the US claimed that China committed to purchase an additional US$200 billion in American goods over two years, on top of existing import levels dating from 2017, before the trade war began.
Lighthizer added, in his interview with CBS, that as part of this, China agreed to buy US$80 billion in agricultural products over two years. Both figures – astronomical in terms of previous US-China bilateral trading numbers – led to a deluge of economists trying to establish whether the numbers add up.
The consensus is that China could meet these lofty import quotas, but that it would involve substantial trade diversion and potentially incurring the ire of its other trading partners.
After the phase one deal was announced, Trump said that negotiations would continue towards a phase two deal, which would include meatier items likely to involve structural reforms to China’s economy. Most analysts remain sceptical as to whether this could be achieved before the US election, which will be held on November 3, 2020.
Sign up now for our 50% early bird offer from SCMP Research: China AI Report. The all new SCMP China AI Report gives you exclusive first-hand insights and analysis into the latest industry developments, and actionable and objective intelligence about China AI that you should be equipped with.
More from South China Morning Post:
- Trade war: China’s trading partners wary of phase one deal, while analysts puzzle over US$200 billion import figure
- Trade war: China lifts tariffs on six US chemical products in goodwill gesture after agreeing phase one deal
- Hong Kong protests, trade war paint picture of tough times for China’s go-to village for fake oil paintings
- Trade war lands Asian exports in worst condition since the global financial crisis
- China defends economy with rhetorical Q&A amid slowing growth rate, trade war pressures
This article Trade war: China’s top negotiator Liu He to visit US for phase one deal signing this week, source says first appeared on South China Morning Post