The United States and China have until this Sunday, Dec. 15, to strike a Phase One trade deal. New U.S. tariffs will take effect on Sunday, unless trade negotiators from both countries reach an agreement.
On Tuesday, Dec. 10, U.S. and Chinese trade representatives indicated that a unanimous agreement for the Phase One trade deal might not occur by this Sunday—the date President Donald Trump had set for tariffs to increase on $165 billion of Chinese goods.
Trade negotiators from both sides seemed to be preparing for a possible delay of U.S. tariffs, as the two sides are still working on the specific terms of the agreement.
U.S. negotiators persevered to get the Chinese to agree to buy more agricultural products from the United States. The United States also wanted a quarterly review of the promised purchases. China, however, wanted its agricultural purchases to be proportional with the amount of tariffs the United States rolls back.
Both the Chinese and U.S. trade talks representatives stated that there was no fixed deadline for the trade agreement.
On Friday, Dec. 6, White House economic adviser Larry Kudlow said there was “no arbitrary deadline” for the trade deal.
Kudlow also stated that a Dec. 15 tariffs deadline to impose a fresh round of U.S. tariffs on Chinese consumer goods is still in place.
Kudlow, who is the head of the White House National Economic Council, warned on Tuesday, Dec.10, that a December tariffs deadline remains in place.
“The reality is that those tariffs are still on the table,” said Kudlow, stating that President Trump, encouraged by the progress of the negotiations, embraced a “constructive and optimistic tone” about the outcome of the trade deal.
Despite a looming deadline and conflicting reports about the trade negotiations, U.S. stocks remained steady on Tuesday.
U.S. retailers were not waiting for the new 15% tariffs set to hit Chinese products on Sunday. Retailers had gone ahead to stock up and prepare for the holiday season to avoid the bite of the additional tariffs.
The United States is on track for a ‘really good’ holiday retail season, said Matt Shay, president of the National Retail Federation (NRF).
“At this point, holiday merchandise is already in the country, so the direct impact of new tariffs won’t be seen until the season is over,” NRF vice president for supply chain and customs policy, Jonathan Gold said in a statement.
Meanwhile, Chinese total exports in November fell for the fourth consecutive month by 1.1 percent from a year earlier in November. To the United States, Chinese exports plummeted by 23%, the worst result for export to the United States since February and the 12th monthly decline.
The drop in Chinese exports for November indicated that U.S. tariffs are hurting China’s exports at a time when global demand is already fragile. The fall could be one reason for China to want to settle to a Phase One trade deal with the United States.
President Trump himself has not made any comments so far this week. With both sides hinting that the Phase One negotiations could drag on and extend beyond this Sunday, there is currently no clear indication for a quick respite for those waiting for a definitive resolution.