The Trump administration and China are expected to announce a modest trade agreement on Friday that would suspend tariffs that are due to start on Sunday.
A senior administration official said a policy announcement regarding China would take place on Friday. The official spoke on condition of anonymity to discuss internal planning.
A “deal is close,” said Myron Brilliant, the US Chamber of Commerce’s head of international affairs, who has been briefed by both sides.
Mr Brilliant said the administration has agreed to suspend President Donald Trump’s plans to impose tariffs on $160 billion in Chinese imports Sunday and to reduce existing tariffs, though it was not clear by how much.
In return, Beijing would buy more US farm products, increase Americans companies’ access to the Chinese market and tighten protection for intellectual property rights.
The deal awaits final approval from Mr Trump. The president did not comment to reporters on the talks when returning to the White House late on Thursday.
Earlier. he used Twitter to declare: “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”
The president’s comments triggered a daylong rally on Wall Street that carried over to Asian trading. The Dow Jones Industrial Average surged 220 points, or 0.8% on Thursday. In Friday trading, Japan’s Nikkei 225 index jumped 2.6% while the Shanghai Composite index advanced 1.5%.
Beijing had threatened to retaliate if Mr Trump proceeds with plans to raise tariffs on $160 billion of Chinese imports on Sunday.
The two sides are negotiating a so-called Phase 1 agreement to help resolve their sprawling trade dispute. Still, the truce appears to leave unsettled the toughest and most complex issues that have divided the sides.
Despite the plans for an announcement, it’s not a done deal, noted Jeffrey Halley, a market with Oanda.
“After such an interminable wait and having being led to water before, I would like to see something official in writing officially. Further to that point, although the in-principle agreement may have been agreed, the legally binding text has yet to be drawn up,” he said.
Since July 2018, the Trump administration has imposed import taxes on $360 billion in Chinese products. Beijing has retaliated by taxing $120 billion in US exports, including soybeans and other farm products that are vital to many of Trump’s supporters in rural America.