David J. Lynch
The U.S. and China have reached agreement on a tentative trade deal, which President Trump is expected to formally approve this afternoon, according to several people familiar with the administration’s internal deliberations.
“The deal is essentially done. The mechanics of how you execute it and how you get it signed still have to be worked out,” said one of the people, who requested anonymity because they were not authorized to speak to the press.
Business leaders who have grown anxious for relief from the trans-Pacific tariff wars welcomed the news. “That is excellent news. It puts a floor under the deterioration in the relationship,” said Craig Allen, president of the U.S.-China Business Council.
Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, said the deal would benefit American manufacturers and farmers. “It’s an important first step, but just a first step,” he said. “There is more work to be done.”
Several people close to the talks said the administration had not shared with them the text of the deal, which they described as an “agreement-in-principle.” Trump two months said he had reached “an agreement in principle” with China and expected to commit the terms to paper within a few weeks.
Trump met with his top advisers Thursday afternoon as they prepared for a final decision within hours.
The president has until Sunday to determine whether to impose tariffs on $160 billion in Chinese imports. Most analysts expected Trump to delay or cancel the import tax in hopes of reaching an initial trade deal.
Even before a formal presidential decision to proceed, Republican critics of the so-called “Phase One” agreement sounded the alarm.
Senator Marco Rubio, a Florida Republican and member of the Senate Foreign Relations Committee, warned against settling too quickly with Beijing. “@WhiteHouse should consider the risk that a near-term deal with #China would give away the tariff leverage needed for a broader agreement on the issues that matter the most such as subsidies to domestic firms, forced tech transfers & blocking U.S. firms access to key sectors,” Rubio tweeted.
Derek Scissors, a China hawk with the American Enterprise Institute and occasional administration adviser, accused the president of rushing to make a deal. “This is really weird,” Scissors said. “Technically, there’s been a deal on the table for the president to sign for some time. What’s changed is they think the president will say ‘yes.’”
Early Thursday morning, Trump teased investors with word of a potential deal with China, sending the stock market briefly higher amid optimism about a breakthrough in the lengthy standoff.
“Getting VERY close to a BIG DEAL with China,” the president tweeted shortly after Wall Street opened. “They want it, and so do we!”
The Dow Jones industrial average quickly rose more than 300 points, or roughly 1 percent, within the first hour of trading as financial markets cheered the prospect of a “Phase 1” deal with China. The market later surrendered some of its gains, though, and was up fewer than 100 points in shortly before the close of trading.
U.S. officials have said they are nearing a limited accord that will require China to buy large amounts of American farm goods, tighten its intellectual property protections, ease access to its financial services market and agree to strict enforcement measures in return for the reversal of some U.S. tariffs.
The emerging deal would fall well short of the president’s initial goal: a comprehensive settlement of U.S. complaints about subsidized Chinese state businesses and trade secrets theft.
The president has often suggested the two sides were close to a deal only to see negotiations stall in the past. In April, Trump said the White House and Chinese negotiators were within weeks of an “epic” deal. The next month, talks collapsed amid U.S. charges that Beijing had reneged on a tentative bargain.
Hints of progress with China come as the White House is celebrating victory on another front in Trump’s trade wars. This week, House Democrats agreed to support a revised version of a new North American trade deal, which the president had signed last year with Mexico and Canada.
House Speaker Nancy Pelosi (D-Calif.) backed the agreement after securing amendments that toughened enforcement of labor and environmental standards. The modified accord also dropped an extension of patent protections for a class of new drugs known as biologics, which Democrats said would lead to higher prescription drug prices.
The new U.S.-Mexico-Canada Agreement is expected to reach a House vote next week and clear the Senate early next year. Once approved by the legislatures in each country, it will supplant the 1994 North American Free Trade Agreement, which Trump has called “our country’s worst trade deal.”
The bipartisan cooperation on trade is occurring even as House Democrats move forward with plans to impeach the president over his demand that Ukraine announce an investigation of one of his political rivals before receiving $391 million in congressionally authorized military aid.