Donald Trump says US and China 'very close' to trade deal as fresh tit-for-tat tariffs loom

BEIJING/WASHINGTON: China and the United States are in close communication on trade, officials in Beijing and Washington said, days before tit-for-tat tariffs are due to go into effect. U.S. President Donald Trump on Thursday said on the United States was "very close" to nailing down a trade deal with China. "Getting VERY close to a BIG DEAL with China," Trump posted on Twitter. "They want it, and so do we."

During a regular briefing on Wednesday in Beijing, Gao Feng, a spokesman at the Chinese commerce ministry, told reporters "The two sides` economic and trade teams are maintaining close communication." Stock markets jumped on Trump`s tweet, and the S&P 500 shot to a record high, gaining 0.85% on the day. U.S. negotiators have offered to cut existing tariff rates on $360 billion in Chinese goods by as much as 50%, one person briefed on the negotiations said. They have also offered to suspend tariffs due to go into effect on Dec. 15, the Wall Street Journal reported on Thursday.

The White House had no comment on any offers. Gao declined to comment on possible retaliatory steps if Washington imposes more tariffs on Chinese goods this weekend. The United States is due to impose tariffs on almost $160 billion of Chinese imports such as video game consoles, computer monitors and toys on Dec. 15.

Trump is expected to meet top trade advisers on Thursday afternoon to discuss the move, sources told Reuters previously. Trump`s son-in-law Jared Kushner has recently taken a larger role in U.S.-China trade negotiations, and is among the advisers pushing the 50% tariff rollback, one person briefed on the talks said.

Analysts at Capital Alpha Partners said Thursday they expect Trump to announce a delay in the Dec. 15 tariffs as soon as Thursday for more than 30 days. A decision to proceed with the Dec. 15 levies could roil financial markets and scuttle U.S.-China talks until after the U.S. presidential election next November. The 17-month-long trade war between the world`s two largest economies has slowed global growth and dampened profits and investment for companies around the world.

The countries agreed in October to conclude a preliminary trade agreement, but Beijing is baulking at U.S. demands that its promises to buy a specific amount of agricultural goods. Beijing is also demanding rollbacks of existing tariffs imposed by the United States. Beijing has said it would retaliate if the United States escalates the trade dispute.

In August, China said it would impose 5% and 10% in additional tariffs on $75 billion of U.S. goods in two batches. Tariffs on the first batch kicked in on Sept. 1, hitting U.S. goods including soybeans, pork, beef, chemicals and crude oil. The tariffs on the second batch of products are due to be activated on Dec. 15, affecting goods ranging from corn and wheat to small aircraft and rare earth magnets.

China also said that it will reinstitute on Dec. 15 an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of 2019.