US sources: agreement on terms of trade with China, but Beijing remains silent
Economy News _ Baghdad
US sources said that Washington would suspend some customs duties on Chinese goods and reduce others in exchange for Beijing buying more American agricultural commodities, but the lack of confirmation from either side casts doubt on whether there is a final agreement.
A source with knowledge of the status of the bilateral negotiations said the United States would suspend duties on Chinese goods worth $ 160 billion, which are expected to enter into force on Sunday and reduce other existing fees.
In return, Beijing will agree to purchase US $ 50 billion in agricultural commodities in 2020, double the amount it bought in 2017, before the outbreak of the trade dispute, according to two US-based sources who took note of the progress of the talks.
But there have been no official announcements from Washington or Beijing, raising questions about whether the conditions have met the approval of both sides.
New Chinese duties on American goods are scheduled to start at 0401 GMT on Sunday, while US fees will apply to Chinese goods from 0501 GMT. Both sides will have to issue formal announcements to postpone or cancel those fees.
Two sources familiar with the negotiations said earlier that Washington had offered to reduce fees based on Chinese goods by 50 percent, and to suspend the new fees due on Sunday in order to reach a "stage 1" agreement that first appeared in October.
It was not clear whether there was a written agreement, or whether Beijing had agreed to it, Reuters told a source familiar with the negotiations, based in Washington.
"It is not at all clear to me: is this an agreement in principle or is it an agreement?" The source said.
The Chinese yuan jumped to a four-and-a-half-month high against the US dollar, and Chinese stocks rallied strongly on Friday, triggered by the news.
An American business community official in Beijing told Reuters he saw all of this as akin to a "final offer" that Trump had agreed to, but that Beijing had not yet confirmed.
Some analysts also continued to question China's ability to increase purchases of agricultural goods, which increased sharply.
For example, the demand for soybeans - a major American product used in the feed industry - fell sharply after the outbreak of the African swine fever epidemic in China. They say that this decline also makes it difficult to implement a significant increase in corn purchases.
It will also be difficult to increase purchases of other US agricultural products, such as beef, by analysts, according to analysts.
"Logistically, there is simply no way that they can double imports within a year," said Darren Friedrichs, chief commodity market analyst for Asia at Intel FC Stone.