Big Progress!

The Wall Street Journal reports U.S. Presses China on Trade Proposals

Since President Trump and Chinese President Xi Jinping met in Buenos Aires on Dec. 1, Beijing has pledged to cut tariffs, buy more U.S. goods and services, ease restrictions on foreign companies operating in China and further open sectors for foreign investment.

The 90-day talks are due to wrap up on March 1. If no agreement is reached, the U.S. said it will boost tariffs on $200 billion of Chinese goods to 25% from the current 10%, potentially having a big impact on electronics, furniture, machinery and other U.S. industries that rely on Chinese imports. It could also deepen a slowdown in China’s economy, which would have broad consequences for global growth.

The people familiar with the state of negotiations said the president may be overstating how close the two sides are to an agreement. They note Mr. Trump has looked to calm markets, which have gyrated in recent days, in part, because of concern that the trade fight between the U.S. and China could spin out of control.

The trade representative’s office is now leading trade talks, though Treasury is also playing a significant role. Treasury has wanted to keep the espionage issue separate from trade talks, as a way to keep the trade negotiations advancing. But others in the government continue to press for Treasury sanctions, both to punish Beijing and to make clear that the U.S. will enforce agreements.

On exports, Mr. Mnuchin has said that China is committing to buy an additional $1.2 trillion in U.S. goods and services, though he didn’t specify the time frame. Last year, the U.S. shipped $188 billion of goods and services to Beijing and ran a $336 billion deficit in total trade.

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