According to a spokesman for the Ministry of Commerce, the U.S. and China have decided to rollback tariffs regarding each other’s goods as they pursue a deal. “In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement,” spokesman Gao Feng said Thursday.
“If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement, which is an important condition for reaching the agreement,” Gao said.
This may provide an opportunity to de-escalate the current trade war that has vexed the current world economy. China has been pursuing the removal of certain tariffs that were imposed by Donald Trump that now apply to most of its exports to the U.S. “The question right now is what the two sides have actually agreed on — the market’s focus has shifted to how the U.S. may react to China’s tariff remarks tonight or in coming days,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. “Investors are still cautious.”
Both sides have been coordinating on where Trump & Xi may meet. Earlier today, China placed three nationals in prison with the maximum punishment for trafficking fentanyl to the U.S. Recently, officials in the Trump Administration have been optimistic about a trade deal that has boosted the equity markets to record numbers this week.