Chief negotiators on both sides held two calls within two weeks to cut Phase 1 of the China-US trade deal. The call brought US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He together.
Working on resolving issues
The US and China have “reached consensus on properly resolving relevant issues according to a Ministry of Commerce statement. In an early Tuesday call, the two sides also agreed to talk about the remaining issues to complete Phase 1 of the trade deal. The office of the US Trade Representative confirmed that they talked with the Chinese on Tuesday morning but did not comment on the discussions.
The two largest economies in the world have tried to strike a deal on Phase 1 of trade talks since October. Both parties have made significant concessions for others on issues like intellectual property and food imports. The biggest beneficiary of the talks was Huawei Technologies Co., a Chinese tech giant, which was labeled a threat for national security earlier. The company lost contracts with major American corporations but will regain them soon.
Vice Premier Liu said that he is “cautiously optimistic” about the conclusion of Phase 1 of the trade deal. Note that while talks have progressed, US President Donald Trump has not given a clear deadline for the talks. Some experts speculate that the talks could easily extend into 2020.
Optimism in the markets
Asian stocks remained optimistic of the trade deal and gained on Tuesday even though the yen declined in value. However, caution is still flying high in the air. Recently, the US legislature passed a bill that supported Hong Kong protestors. Chinese President Xi Jinping urged for an equal agreement, and the efforts from both sides show that they are interested in peaceful trade.
However, the responsibility is higher on the shoulders of President Trump. If his negotiators don’t cut a deal with China before Dec. 15, he will have to finally decide if he wants to impose a 15% tariff on Chinese exports worth about $160 billion. Trump also said last week that the trade deal was “potentially very close”, but he denied that it could be an even deal. He said that the US is “starting off from the floor” while China is “already at the ceiling.”
His statements contrast with that of President Jinping, which means that the President is looking for a pro-US deal.