Market Overview

Report: China To Purchase $50B In US Farm Products In Exchange For Tariff Relief

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Report: China To Purchase $50B In US Farm Products In Exchange For Tariff Relief

The United States could halt proposed tariffs on Chinese goods in exchange for China’s proposal to buy $50 billion in the U.S. farm products in 2020, according to Reuters.

What Happened

Sources said on Thursday that President Donald Trump could sign a last-minute trade deal with China to delay or cancel the proposed tariff imposition on Chinese goods scheduled to take effect Sunday.  

According to the agreement, China is expected to buy $50 billion in U.S. agricultural products next year, up from $24 billion it bought in 2017 before the trade war between the two countries started.

In return, the United States would cancel or postpone tariffs on $160 billion in Chinese goods expected to go into effect Dec. 15, said the sources to Reuters.

Nothing Official Yet

The countries have not officially released any statements to confirm the deal yet, but on Thursday, Trump tweeted that the U.S. is “getting very close to a big deal with China.”

“They want it, and so do we!” wrote the president.

Sources familiar with the negotiations earlier told Reuters that the U.S. could offer to cut current tariffs on Chinese goods by up to 50% as well as cancel the proposed tariffs scheduled to be kick in Sunday in a bid to secure a “Phase 1” deal first announced in October.

Why It Matters

The new deal could ease the ongoing trade tensions between the two countries just before a new phase of the trade war is set to aggravate the situation further.

“If signed, this is an encouraging first phase that puts a floor under further deterioration of the bilateral relationship,” said Craig Allen, the president of U.S.-China Business Council.

“But this is just the beginning. The issues facing the US and China are complex and multi-faceted. They are unlikely to all be resolved quickly,” added Craig.

Posted-In: Donald Trump Reuters tariffsGovernment News Politics Media General Best of Benzinga

 

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