The president, Donald Trump, assured today that he has not yet agreed with China a gradual withdrawal of the tariffs that both parties have been imposing during the trade war they are waging, which deflated the optimism that had animated the markets this week.
“They would like to go back, we have not agreed anything. China would like to do something like a reverse, not a complete reversal because they know I wouldn’t do that,” the U.S. president told reporters at the White House.
We are getting along very well with China,” he added, “they want to make a deal, frankly they want to make a deal much more than we do, I am very happy right now, we are making billions of dollars”.
Trump’s words on tariffs contradict Thursday’s announcement by the Chinese Commerce Ministry that it had reached an agreement with Washington to phase out the levies that have been imposed by both sides since March 2018.
Sources aware of the talks in the country yesterday confirmed to Efe that the withdrawal in trade tariffs was part of the “phase one” of the agreement, of which no concrete proposals are yet known and which is still being drafted by the negotiating teams in Washington and Beijing.
INCOGNITA REGARDING DECEMBER’S TARIFFS
Within the Administration there are differences on how to deal with these negotiations and for now a new tariff increase scheduled for December 15 is still in force and would affect Chinese imports worth $156 billion.
The White House’s chief trade adviser, Peter Navarro, said today that the imposition of taxes is still “on the table,” although he did not rule out that it will finally be suspended.
“What is on the table are the tariffs that come in December, December 15 (…) I think we would be willing, well it depends on the president, to postpone those taxes,” Navarro said in statements to the radio station NPR.
The Chinese government has demanded that this new round of tariffs be cancelled as part of the talks, but for now Washington has resisted giving in.
If it does occur, that new round of levies would impact telephones and computers, and would also cover virtually all trade between the two countries.
IOWA AS A POSSIBLE SCENARIO FOR THE END OF THE DISPUTE
Despite contradicting Beijing’s announcement, Trump today insisted on his intention to meet with his Chinese counterpart, Xi Jinping, to sign an agreement to end the trade war in a scenario that could be Iowa.
Both were expected to sign an agreement during the APEC summit in Chile, which was to be held on the 16th and 17th in Santiago, but this date had to be cancelled due to protests.
Today Trump reiterated that the signature “could be in Iowa” or on another “farm”.
Iowa, an eminently agricultural state, is key in the 2020 presidential election for being the first to hold its primary process and, moreover, has been hit hard by the trade war because of Beijing’s tariffs on soy.
A PHASED AGREEMENT
Whatever the final pact, Trump has described the negotiations as a three-stage process, of which there is still no agreement for the “first phase”.
Already in October, the government reported a possible truce in the trade dispute with China and announced a freeze on tariffs it planned to impose that month, while assuring that Beijing would increase its purchases of U.S. agricultural products to between $40 billion and $50 billion.
According to information provided by Washington, the pact would include measures related to the devaluation of the Chinese currency and intellectual property issues, although it will not address one of the most thorny issues: the obligation of foreign companies in China to share technological information with the government.
That issue will be relegated to a “second phase,” as Trump has explained in recent days.
A SCARE FOR THE MARKETS
The markets received Friday’s statements from Trump with surprise and the Dow Jones Industrials, the main indicator of Wall Street, recorded a decline of 0.2%, while the selective S&P and Nasdaq also experienced a decline of two tenths, but then came back.
The possibility of a trade agreement had given hope to markets, which traded at higher levels this month.
Earlier this Thursday, after Beijing announced the deal with Washington, Wall Street closed green with its main index, the Dow Jones, setting a new historical record with a rise of 0.66% or 182.24 points to 27,674.80.