WASHINGTON– US and Chinese negotiators have reached a preliminary agreement that would ease trade tensions but fall short of a comprehensive deal, people familiar with the talks told CNN on Friday.
Details are still emerging, but one person familiar with the agreement said it’s likely to include some US tariffs relief. An increase in duties was due to take effect next week. It’s not clear what China has agreed to, but ahead of Friday’s talks a person familiar said an increase in farm purchases was possible.
The scope of the agreement won’t be finalized until President Donald Trump meets Chinese Vice Premier Liu He in the Oval Office later this afternoon.
Earlier Friday, Trump and other officials close to the US-China trade talks are indicating there was better-than-expected progress during the first day of high-level negotiations in Washington Thursday, causing stocks to buoy Friday morning in the hopes a deal would be reached.
Trump told press Thursday afternoon that he thinks negotiations are “going really well” and Friday morning, he tweeted that one of the “great things” about a possible deal is that it doesn’t need congressional approval, like the US-Mexico-Canada Agreement, which has not been ratified by Congress.
“One of the great things about the China Deal is the fact that, for various reasons, we do not have to go through the very long and politically complex Congressional Approval Process,” Trump wrote. “When the deal is fully negotiated, I sign it myself on behalf of our Country. Fast and Clean!”
Officials worked through Thursday at the offices of the US Trade Representative, and remained at the table, during a planned lunch break.
On Friday morning, the Dow rallied about 400 points. The stock bounce came as a new University of Michigan consumer sentiment survey indicated that optimism among American consumers rebounded in October to the highest level in three months, due in part to easing concern over the US-China trade war.
Over the past few months, the survey has shown Americans’ growing concern over trade tensions. But fear of a negative impact on consumers “slightly lessened” in October, said Richard Curtin, chief economist of the survey.
Trump and Liu have met face-to-face after previous rounds of talks and each time appear to make some progress. Officials believe the same dynamic is at play now — and think Trump is in a place where he’s willing to take a step toward easing tensions.
What that means isn’t exactly clear. Officials familiar with the talks say possible outcomes will likely fall short of a sweeping, comprehensive trade deal that Trump has called for.
Instead, a smaller deal could include new currency agreements, Chinese commitments on farm purchases and a halt on US tariffs that are due to increase next week.
Thursday’s progress during high-level talks follows a Wednesday’s near stalemate.
A person familiar with the preliminary deputy-level talks earlier this week said there was little to no progress on some of the core issues the US has been looking at on technology and industrial policy issues.
If Friday’s negotiations and Oval Office meeting go well, Trump and Liu could also begin laying the groundwork for a meeting between Trump and Chinese President Xi Jinping at next month’s APEC summit in the Santiago, Chile.