Skip to main content
Open this photo in gallery:

U.S. President Donald Trump speaks during a meeting with China's Vice-Premier Liu He at the White House on Oct. 11, 2019.Yuri Gripas/Reuters

The White House reached a “deal in principle” with Beijing on trade, sources briefed on the talks said on Thursday, but it may be narrower than the Phase 1 deal U.S. President Donald Trump promised in October.

The United States has agreed to reduce some tariffs on Chinese goods and delay a tranche of tariffs that were slated to go into effect on Dec. 15 as part of a trade deal between the two economic giants, a U.S. source familiar with the situation said on Thursday.

China also has agreed to make US$50-billion in agricultural purchases in 2020 as part of the deal, that person and another U.S. source familiar with the talks said.

One former senior trade negotiator said the devil was in the details of the written agreement, which is still being worked out. “In trade negotiations, written text is important since that’s where a lot of the lingering disagreements tend to resurface.”

Mr. Trump has signed off on the deal, one source said.

In an attempt to secure a Phase 1 trade deal, U.S. negotiators earlier offered to cut existing tariffs on Chinese goods by as much as 50 per cent as well as suspend new tariffs that were scheduled to go into effect on Sunday, two people familiar with the negotiations said earlier on Thursday.

The U.S.-China trade war has slowed global growth and dampened profits and investment for companies around the world. The United States has announced US$28-billion in subsidies for farmers who were affected by the trade war.

China bought US$24-billion in U.S. farm products in 2017, before the trade war started, according to U.S. Department of Agriculture figures.


Mr. Trump said in a White House news conference on Oct. 11 with Chinese Vice-Premier Liu He that the two countries had agreed to a Phase 1 trade deal on “intellectual property, financial services” and a “purchase of from [US$40-billion] to US$50-billion worth of agricultural products.”

A written agreement would be available in weeks, Mr. Trump said then, adding, “we’ve agreed in principle to just about everything I mentioned, all of the different points.”

However, Beijing has balked at committing to buy a specific amount of agricultural goods during a certain time frame. Chinese officials said they would like the discretion to buy based on market conditions.

Officials from China have demanded the U.S. roll back tariffs that Mr. Trump put in place as a condition of any Phase 1 deal. The Trump administration put tariffs on hundreds of billions of dollars in Chinese imports, starting in July, 2018.


If Mr. Trump does not suspend the tariffs scheduled to go into effect on Dec. 15, Beijing officials will apply more tariffs on U.S. goods and may suspend talks until after the U.S. presidential election in November, 2020, trade experts believe.

The Dec. 15 tariffs would apply to almost US$160-billion of Chinese imports such as video-game consoles and computer monitors.

In August, China said it would impose 5 per cent and 10 per cent in additional tariffs on US$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 it will reapply on Dec. 15 an additional 25-per-cent tariff on U.S.-made vehicles and 5-per-cent tariffs on auto parts that had been suspended at the beginning of 2019.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe