China presses US to drop tariffs on $360 bn of imports before trade deal

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China is seeking the roll back of US tariffs on as much as $360 billion of Chinese imports before President Xi Jinping agrees to go to the US to sign a partial trade deal with President Donald Trump, according to people familiar with the matter.

Negotiators asked the Trump administration to eliminate tariffs on about $110 billion in goods that were imposed in September and lower the 25% tariff rate on about $250 billion that began last year, said some of the people, who asked not be named discussing the private talks.

Chinese officials also suggested the US could temporarily waive some tariffs, people familiar with Beijing’s position said. In return, China could remove tariffs on a reciprocal amount of US goods, mostly farm products, one of the people said.

China has also previously demanded that Trump cancel plans to impose duties on roughly $160 billion in imports, scheduled for Dec. 15, which would hit consumer favorites like smart-phones and laptops. At the very least, those tariffs have to be taken off the table for Xi to get on a plane to meet Trump, the people said.

Enforcement Mechanism

The Financial Times reported earlier that US officials are debating whether to remove levies imposed in September including clothing, appliances, and flat-screen monitors, citing people briefed on the discussions. The Ministry of Commerce in Beijing didn’t immediately respond to a fax seeking comment on China’s position.

US Trade Representative Robert Lighthizer and other officials have consistently argued that the duties on the $250 billion of goods are a way of making sure that China lives up to its commitments and should be in place for the long-term.

On Tuesday, Xi reiterated China’s commitment to economic openness and the global trading order at a speech in Shanghai, striking a somewhat softer tone than his address to the same conference a year ago, where he took some veiled swipes at Trump’s “America First” polices. The two presidents are working toward a face-to-face meeting to ink the first phase of a trade deal, which would include Chinese pledges on increasing purchases of US agriculture products, keeping its currency stable and protecting intellectual property.

China is reviewing locations in the US where Xi would be willing to meet with Trump, Bloomberg News reported Monday. Chinese officials had initially hoped the signing would be linked to a formal state visit but they’re open to having Xi come to the US without one, the people said, adding that no final decision had been made. The decision is now between Alaska and Iowa for the signing location, people briefed on US plans said.

Commerce Secretary Wilbur Ross said in a telephone press conference from Bangkok Tuesday that achieving a phase one deal will help rebuild trust between the two sides, and that he hoped it would be the precursor of further discussions.

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