US-China close to reaching major trade deal

US President Donald Trump and Chinese President Xi Jinping. Photo: AFP

The Wall Street Journal quoted anonymous sources from the US and China as saying that negotiators from both sides have made great progress and a final agreement is about to be reached.

A deal would be welcomed by financial markets, which have borne the brunt of the trade conflict between the world's two largest economies.

The Wall Street Journal said talks last month in Washington helped narrow differences, meaning a formal agreement could be ready when US President Donald Trump and his Chinese counterpart Xi Jinping meet in late March, during Xi's trip to Europe.

However, the source stressed that there are still some obstacles, and the pact is likely to generate complaints from both sides that there are too many concessions.

Sources confirmed that China tends to accept tax reduction or remove restrictions on agricultural products, chemicals, automobiles, etc.

Chinese negotiators have also proposed accelerating the timeframe for removing foreign ownership restrictions on joint venture cars and reducing tariffs on imported vehicles to below the current 15 percent.

In a move in response to Mr. Trump’s repeated demands to narrow the trade gap between the United States and China, Beijing will also increase its purchases of American goods, including the possibility of buying billions of dollars worth of natural gas from Cheniere Energy Corporation.

In exchange for China's concessions, Washington will also lift most of the trade sanctions it imposed last year.

The newspaper quoted analysts as saying that the outcome of Trump’s recent summit with North Korean leader Kim Jong-un in Hanoi could impact these trade negotiations in one of two opposite ways: It could convince Beijing that Trump is desperate to win, or China could see it as a signal that Trump, as his advisers have noted, is willing to walk away from a bad deal.

The tit-for-tat trade “war” that has lasted for the past year has imposed punitive tariffs totaling billions of dollars on a large part of the trade between the two economic powerhouses.