US President Donald Trump’s administration officials have discussed offering a limited trade agreement to China that would delay and even roll back some US tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases, according to five people familiar with the matter.
Some of Trump’s top trade advisers in recent days have discussed the plan in preparation for two rounds of face-to-face negotiations with Chinese officials in Washington, due to take place in coming weeks, the people said.
The discussions are preliminary and Trump has yet to sign off on it.
The president told reporters, in response to a question about the potential for a limited agreement, that he would be open to an interim deal — but would prefer a lasting one.
“A lot of people are talking about, and I see a lot of analysts are saying: an interim deal, meaning we’ll do pieces of it, the easy ones first,” Trump said late on Thursday.
“But there’s no easy or hard. There’s a deal or there’s not a deal, but it’s something we would consider,” he added.
The proposal would freeze the conflict rather than bring resolution to a trade dispute that has cast a shadow over the global economy. US equities and Asian stock futures advanced afer news of the discussions.
The plan reflects concerns within the White House over the recent escalation in tariffs and their economic impact on the US going into an election year.
Polls show the trade war is not popular with many voters and farmers are increasingly angry over depressed commodity prices.
One of the main goals is to strike a deal that would allow the administration to avoid going ahead with more tariffs in December that would hit consumer products ranging from smartphones to toys and laptop computers. Also in play is a further delay in a tariff rate hike due to take effect next month.
Exact details of a possible deal, like what specific commodities and how much China will buy and when, still need to be worked out.
However, the idea is that the deal would include intellectual property commitments that China had agreed to in negotiations in the spring before talks broke down, leading to a summer of escalation.
When those talks fell apart in May, the two sides were circulating a 150-page draft agreement and White House officials have repeatedly said they were 90 percent of the way to securing a deal.
China has insisted throughout the negotiations that any deal would have to see a withdrawal of US tariffs.
It is not clear if special licenses for Huawei Technologies Co (華為) will be part of the deal, two of the people said, citing congressional worries over national security issues related to the Chinese company.
China has made it clear throughout the negotiations that it wants the US to remove the company from its export blacklist and denies claims that Huawei was spying for the Chinese government.
Working-level trade teams from the US and China are to meet next week, Xinhua news agency reported on Thursday, citing Chinese Vice Premier Liu He (劉鶴).
US Trade Representative Lighthizer and US Secretary of the Treasury Steven Mnuchin are scheduled to sit down with Liu in early next month.