Can a deal be done?

I recently read an interesting article regarding the US partially easing tariffs -taxes imposed on imports -on China. It was written by Phillip Inman, who is the economics writer for the Guardian. 

China hopes a deal to end trade wars with the US can be reached after some tariffs have been rolled back. 

Chinese officials can confirm that a first-stage trade deal with the US has been planned. It includes Beijing ending the purchase of some US agricultural goods in exchange for Washington lightening tariffs on Chinese imports.

Beijing wants to roll back tariffs on £280bn of Chinese imports before the signing of a partial trade deal with the US. The negotiators want Trump to scrap tariffs on about $110bn of goods that were imposed in September and decrease the 25% tariff rate.

There have been many issues with the deal, the US is seeking to extract broader concessions forcing China to protect American companies from property theft and unfair competition.

Chinese President Xi Jinping shakes hands with U.S. President Donald Trump before a bilateral meeting during the G20 Summit on June 29, 2019 in Osaka, Japan.

China’s demands for further cuts could be a deal-breaker, and if the US considers the smaller deal as a limited first step towards a second deal, it will want to keep the pressure on. Without sufficient tariffs, in place, China is less likely to cooperate in the next stage of negotiations on tougher issues.

Economists have already shown that the two countries trade war has slowed global growth significantly and an interim trade deal that rolls back some tariffs can potentially improve the economic forecasts.