U.S. offers China tariff rate cut; announcement 'imminent'
WASHINGTON/BEIJING (Reuters) - The United States has offered to cut existing tariffs on Chinese goods by as much as 50% and suspend new tariffs expected to go into effect Sunday in an attempt to secure a "Phase One" trade deal.
U.S. negotiators have offered to reduce tariffs on about $375 billion in Chinese goods by 50% across the board, two people familiar with the negotiations said on Thursday, and suspend tariffs on $160 billion in goods scheduled for Dec. 15.
U.S. Trade Representative Robert Lighthizer told senators during a briefing that announcements were possibly "imminent" on U.S. tariffs, Senator John Cornyn told reporters.
U.S. President Donald Trump and Chinese President Xi Jinping have been embroiled in a 17-month trade war that has slowed global growth and dampened profits and investment for companies around the world.
Dec. 15 is a crucial date. If the United States does not suspend the new tariffs, Beijing officials will apply more tariffs on U.S. goods and may suspend talks until after the U.S. presidential election in November 2020, many trade experts believe.
Trump said on Thursday the United States was "very close" to nailing down a deal. "Getting VERY close to a BIG DEAL with China," Trump posted on Twitter. "They want it, and so do we."
During a regular briefing on Wednesday in Beijing, Gao Feng, spokesman at the Chinese commerce ministry, told reporters: "The two sides' economic and trade teams are maintaining close communication."
Stock markets jumped on Trump's tweet, and the S&P 500 (SPX) shot to a record high, gaining 0.85% on the day.
The White House had no comment on any offers.
The United States is due to impose tariffs on almost $160 billion of Chinese imports such as video game consoles, computer monitors and toys on Dec. 15.
Trump is expected to meet top trade advisers on Thursday afternoon to discuss the move, sources told Reuters previously.
Trump's son-in-law, Jared Kushner, has recently taken a larger role in U.S.-China trade negotiations, and is among the advisers pushing the 50% tariff rollback, one person briefed on the talks said.
A decision to proceed with the Dec. 15 levies could roil financial markets. Gao declined to comment on possible retaliatory steps if Washington imposes more tariffs on Chinese goods this weekend.
Analysts at Capital Alpha Partners said Thursday they expect Trump to announce a delay in the Dec. 15 tariffs as soon as Thursday for more than 30 days.
China and the United States agreed in October to conclude a preliminary trade agreement, but Beijing is balking at U.S. demands that it promise to buy a specific amount of agricultural goods. Beijing is also demanding rollbacks of all existing tariffs imposed by the United States.
Beijing has said previously it would retaliate if the United States escalates the trade dispute.
In August, China said it would impose 5% and 10% in additional tariffs on $75 billion of U.S. goods in two batches. Tariffs on the first batch kicked in on Sept. 1, hitting U.S. goods including soybeans, pork, beef, chemicals and crude oil.
The tariffs on the second batch of products are due to be activated on Dec. 15, affecting goods ranging from corn and wheat to small aircraft and rare earth magnets.
China also said that it will reinstitute on Dec. 15 an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of 2019.
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