U.S. President Donald Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.
The emerging deal, covering agriculture, currency and some aspects of intellectual property protections, would represent the biggest step by the two countries in 15 months to end a tariff tit-for-tat that has whipsawed financial markets and slowed global growth.
But Fridays announcement did not include many details and Trump said it could take up to five weeks to get a pact written.
He acknowledged the agreement could fall apart during that period, though he expressed confidence that it would not.
“I think we have a fundamental understanding on the key issues. Weve gone through a significant amount of paper, but there is more work to do,” U.S. Treasury Secretary Steven Mnuchin said as the two sides gathered with Trump at the White House. “We will not sign an agreement unless we get and can tell the president that this is on paper.”
With Chinese Vice Premier Liu He sitting across a desk from him in the Oval Office after two days of talks between negotiators, the president told reporters that the two sides were very close to ending their trade dispute.
“There was a lot of friction between the United States and China, and now its a lovefest. Thats a good thing,” he said.
Liu took a different tone in his remarks, however.
“We have made substantial progress in many fields. We are happy about it. Well continue to make efforts,” Liu said.
Chinas official state-owned news organization Xinhua said that both sides “agreed to make the efforts towards a final agreement.”
In an editorial published online by the state-run Peoples Daily newspaper on Saturday, China called the latest round of talks constructive, frank and efficient and noted that while the two sides were moving toward a resolution, “it is impossible to resolve the problem by putting arbitrary pressure on the Chinese side.”
Trump, who is eager to show farmers in political swing states that he has their backs, lauded China for agreeing to buy as much as $50 billion in agricultural products. But he left tariffs on hundreds of billions of dollars of Chinese products in place.
His announcement, while seen as progress, drew some scepticism.
“Im unsure that calling what was announced by President Trump an agreement is justified,” said Scott Kennedy, a China trade expert at the Center for Strategic and International Studies in Washington.
“If they couldnt agree on a text, that must mean theyre not done. Wishing an agreement does not one make. This isnt a skinny deal. Its an invisible one.”
Mnuchin said the president had agreed not to proceed with a hike in tariffs to 30% from 25% on about $250 billion in Chinese goods that was supposed to have gone into effect on Tuesday.
But U.S. Trade Representative Robert Lighthizer said Trump had not made a decision about tariffs that were subject to go into effect in December.
“I think that were going to have a deal thats a great deal thats beyond tariffs,” Trump said.
The worlds two largest economies have made progress in their trade dispute before without sealing a deal. In May U.S. officials accused China of walking away from a sweeping agreement that was nearly finished over a refusal to make changes to Chinese laws that would have ensured its enforceability.
Trump had said previously he would not be satisfied with a partial deal to resolve his effort to change Chinas trade, intellectual property and industrial policy practices, which he argues cost millions of U.S. jobs. On Friday he said he had decided that a phased approach was appropriate.
U.S. stocks ended more than 1% higher on Friday but well off the days highs after the announcement, with the S&P 500 up 1.09% after rising as much as 1.7% earlier on hopes of an agreement.
Trump and Chinese President Xi Jinping are both scheduled to attend a Nov. 16 summit of the Asia Pacific Economic Cooperation countries in Santiago, Chile, and Trump hinted that a written agreement could be signed there.
There have been positive signs from China in recent days.
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