[141219.EN.BIZ] Trump Signs Off On Agreement to Pause US-China Trade War

US President Donald Trump has signed off on an initial trade agreement with China that would avoid imminent US tariffs and reduce the rates of existing duties in exchange for a Chinese promise to purchase American farm goods, US officials and others familiar with the agreement said.

Trump's trade team briefed the President on the agreement during a mid-afternoon meeting at the White House.

The US President had already announced the broad contours of the "phase one" deal in October, and the two sides have been haggling over specifics since then. The "phase one" deal does not address the major structural changes to China's economy that Trump has sought.

The terms of the agreement include a delay in new tariffs on US$160 billion in Chinese-made consumer electronics and toys scheduled to go into effect December 15, as well as a reduction by half of some existing US tariffs, said a person familiar with the deal.

In exchange, China has promised to purchase US agricultural products. China has made similar pledges in past negotiations, but has mostly failed to follow through on large purchases.

The breakthrough with Beijing comes weeks after intense negotiations between the world's two economic superpowers resumed in October, reports CNN.

"Trade team from both sides are maintaining close communications," Gao Feng, spokesman at China's Commerce Ministry, said at news briefing, without providing any specifics.

But in recent days, there's been increased optimism the two sides would be able to reach an initial phase one deal as negotiators are moving quickly to review text of an agreement."What people expects is a phase one deal will take place and tariffs won't go up," Jamie Dimon, JPMorgan Chase CEO and head of the Business Roundtable told reporters. "If those things don't happen, it will be a negative for the marketplace and a small negative for global GDP."

Source : HKSG.