China and US close to striking trade deal

China and US close to striking trade deal

02/05/19

Luke Foddy, Communications Manager

The US and China could be ready to announce a deal to end the long-running trade discord as early as next Friday, according to CNBC.

Chinese Vice Premier Liu He will travel to Washington for talks next week, following negotiations in Beijing on Wednesday which seem to have been constructive. The South China Morning Post reports that the two sides have already reached an understanding on how to enforce the agreement – an issue which has been a sticking point in striking a deal.

It is believed that the two sides are putting the ‘finishing touches’ on a deal, Asia Times reports, which would see the US remove 10 per cent tariffs on $200 billion worth of Chinese goods, but keep 25 per cent tariffs on a separate list of $50 billion worth of imports.

However, while positive news for a global economy which has experienced a cooling effect from the trade war, there remains concerns about the shape of the deal and its wider impact.

In a commentary in the Financial Times, Edward Luce expressed concerns about the deal’s radical feature of excluding third parties in disputes – rather, the US and China will hold each other to account. This feature will relegate the WTO “to a bystander,” and risks creating more uncertainty in the global trade system and “weaponise the rule of law,” Luce argues.