Bloomberg Inc. quoted a person familiar with the matter on November 19th that the almost agreed agreement between the United States and China six months ago is now used as a benchmark to determine how much tariffs should be lifted in the initial stages of a broader trade agreement.
The person familiar with the matter said that the two sides are discussing the link between the size of the tariff cuts and the preliminary terms set out in the failed agreement in May. Two of them said that the White House is still debating on a specific scale internally. One of the insiders revealed that China requested that all tariffs imposed after May be immediately abolished, and then the previously imposed tariffs should be phased out.
Two people familiar with the matter said that the possible tariffs being discussed include Trump’s preliminary tariffs on Chinese goods valued at about $250 billion in 2018. Some consultants advocated retaining tariffs for a longer period of time to ensure that China fulfills its commitments, but now they are willing to accept partial relief in order to reach the first phase of the agreement.
Two people familiar with the matter said that US officials have different views on how much tariffs will be covered in the first phase and the proportion of tariffs that the Trump administration should agree to cancel. According to people familiar with the matter, the internal data in the discussion included about 35% of the US trade representative Robert Lighthizer’s proposal, and 60% of the agreement covered by Trump’s agreement.
According to the report, once the two countries have determined a figure, they will either lower the tariff according to the agreed percentage or cancel the tariff according to the figures.