WASHINGTON -- The Trump administration and China are close to finalizing a modest trade agreement that would suspend tariffs that are set to kick in Sunday, de-escalating their 17-month trade war.
"We're close to a deal," said Myron Brilliant, the U.S. Chamber of Commerce's head of international affairs, who has been briefed by both sides.
Brilliant said the administration has agreed to suspend Trump's plans to impose tariffs on US$160 billion in Chinese imports Sunday and to reduce existing tariffs, though it wasn't clear by how much.
In return, Beijing would buy more U.S. farm products, increase Americans companies' access to the Chinese market and tighten protection for intellectual property rights.
The deal awaits final approval from President Donald Trump.
Trump early Thursday to declare: "Getting VERY close to a BIG DEAL with China. They want it, and so do we!"'
The president's comments triggered a daylong rally on Wall Street. The Dow Jones Industrial Average surged 220 points, or 0.8 per cent.
Earlier Thursday, a spokesman for China's Ministry of Commerce, Gao Feng, had told reporters that "the economic and trade teams of both sides have maintained close communication." He offered no additional details.
Beijing had threatened to retaliate if Trump proceeded with plans to raise tariffs on $160 billion of Chinese imports Sunday.
The two sides are negotiating a so-called Phase 1 agreement as part of the effort to resolve their sprawling trade dispute. Still, the truce leaves unsettled the toughest and most complex issues that have divided the two sides.
Three Democratic senators -- Minority Leader Charles Schumer of New York, Ron Wyden of Oregon and Sherrod Brown of Ohio -- sent a letter to the White House on Thursday, urging Trump to "stand firm" in the negotiations with China. They called on the president to hold out for "commitments from the Chinese government to enact substantive, enforceable and permanent structural reform."
The administration accuses Beijing of cheating in its drive to achieve global supremacy in such advanced technologies as driver-less cars and artificial intelligence. The administration alleges -- and independent analysts generally agree -- that China steals technology, forces foreign companies to hand over trade secrets, unfairly subsidizes its own firms and throws up bureaucratic hurdles for foreign rivals.
Beijing rejects the accusations and contends that Washington is simply trying to suppress a rising competitor in international trade.
Since July 2018, the Trump administration has imposed import taxes on US$360 billion in Chinese products. Beijing has retaliated by taxing US$120 billion in U.S. exports, including soybeans and other farm products that are vital to many of Trump's supporters in rural America.
On Sunday, the administration was set to start taxing an additional US$160 billion in Chinese imports, a move that would extend the sanctions to just about everything China ships to the United States.
Repeated rounds of negotiations had failed to achieve even a preliminary agreement. The prolonged uncertainty over Trump's trade policies has curtailed U.S. business investment and likely held back economic growth. Many corporations have slowed or suspended investment plans until they know when, how or even whether the trade standoff will end.
A far-reaching agreement on China's technology policies will likely prove difficult. It would require Beijing to scale back its drive to become a global powerhouse in industrial high technology, something it sees as a path to prosperity and international influence.
Efforts to acquire foreign technology are a theme that runs through Chinese law and government. Security researchers have asserted that Beijing operates a network of research institutes and business parks to turn stolen foreign technology into commercial products.
The Trump administration has been seeking a way to enforce any significant trade agreement with China, reflecting its contention that Beijing has violated past promises. One way to do is to retain some tariffs as leverage.
"They're two such different economies that don't trust each other," said Jessica Wasserman, a trade lawyer at Greenspoon Marder LLP.
