According to U.S. sources, the United States is ready to suspend some tariffs provided China is willing to commit to purchasing more U.S. goods.
As per a source briefed on the status of bilateral negotiations between Washington and Beijing, the U.S. is likely to suspend tariffs on $160 billion in Chinese goods this Sunday, and could potentially even roll back existing tariffs. In return, Beijing will have to agree to purchasing U.S. agricultural goods in 2020 worth $50 billion.
There has not been a confirmation by either Washington or Beijing on these supposed agreed terms.
While new Chinese tariffs on U.S. goods are scheduled to take effect at 0401 GMT on Sunday, new U.S. tariffs on Chinese goods will apply at 0501 GMT.
Both countries will have to make formal announcements to postpone or even cancel the tariffs.
Earlier on Thursday, according to two sources familiar with the negotiations, Washington had offered to cut existing tariffs on Chinese goods by as much as 50% as well as suspend the new tariffs which will kick-in on Sunday, in order to secure the “Phase 1” trade deal.
However it is unclear whether there was ever such a written deal or if China had agreed to it, said a source familiar with the talks.
“It’s very unclear to me: is this an agreement in principle or is it an agreement?” said the source.
According to a few analysts, China may not be able to absorb such a dramatic increase in agricultural purchases.
“There’s just no logistical way that they can double imports in a year,” said Darin Friedrichs, a senior Asia commodity analyst at INTL FCStone.
China has been especially disturbed by Washington’s criticism over Beijing’s handling of the democracy crisis in Hong Kong as well as its setting up of modern concentration camps in Xinjiang.
“We will never accept the so-called unilateral sanctions and any acts of bullying,” said Wang Yi, a senior Chinese diplomat on Friday.
U.S. trade action has already torpedoed the Chinese economy, and has sunk its growth rate to a 30-year low.
Some experts believe, negotiations may be suspended and resume only after the U.S. presidential election in November 2020.