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Signs today of a possible thaw in U.S.-China trade tensions. China's Commerce Ministry announced the two countries have agreed to lift some tariffs as part of a phase one trade deal. Now, there has been no formal announcement of such an agreement from the U.S. side. But just the suggestion that tariffs might be rolled back was enough to spark a rally on Wall Street. The Dow Jones industrial average jumped more than 180 points. NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: The announcement from China's Commerce Ministry came after what a spokesman called serious and constructive talks between the two countries. The spokesman said they'd agreed to a phased cancellation of some tariffs. But he didn't provide any details. The White House also hinted at an agreement. Myron Brilliant, who heads up international affairs for the U.S. Chamber of Commerce, is keeping his fingers crossed.
MYRON BRILLIANT: I am optimistic overall that the two sides are working towards a deal. But it's not done until the deal is actually done.
HORSLEY: That's a lesson that's been underscored repeatedly since this trade war began more than a year ago. President Trump and his Chinese counterpart, Xi Jinping, hoped to have an agreement ready to sign later this month, during an international summit in Chile. But the summit meeting was called off amidst deadly protests, leaving the possible signing in limbo. At the White House this morning, reporters pressed counselor Kellyanne Conway for an update.
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KELLYANNE CONWAY: I don't have an announcement about the specific signing. But as you know, the president is anxious to sign it.
HORSLEY: In the meantime, the cost to the U.S.-China tariff battle has been rising. Imports from China fell nearly $2 billion in September, when the latest round of tariffs took effect. Exports to China dropped by a billion dollars that month. Economist Mary Lovely of the Peterson Institute for International Economics says the trade war will get even more costly if it continues into December, when another round of tariffs is set to kick in. Much of the burden of those tariffs would fall on electronic goods, such as laptops and cellphones.
MARY LOVELY: I think that these last few rounds make little economic sense. They also make little political sense. There's a lot of reasons why the president would want to say yes to a phase one deal.
HORSLEY: It's widely expected the December tariffs will have to be suspended as part of any mini-trade deal. But Brilliant says China may insist on rolling back the September tariffs as well.
BRILLIANT: I don't believe that President Xi Jinping would come to the United States absent a walk back, a reduction of tariffs that are currently in place.
HORSLEY: Brilliant argues that should not be seen as a concession by the Trump administration since lifting tariffs would help the U.S. economy as well.
BRILLIANT: There's got to be a give-and-take here. Both sides have to give something to get something.
HORSLEY: The U.S., for example, is eager to sell more farm goods to China. And in what could be seen as a goodwill gesture, China today imprisoned nine suspected fentanyl smugglers. Chinese fentanyl has contributed to the U.S. opioid epidemic. The White House drug czar called the prosecution a positive step and said he looks forward to further cooperation with China. Any mini-trade deal is not expected to yield a breakthrough on some of the big structural conflicts that led to the trade war, things like the forced transfer of U.S. technology. The chamber's Myron Brilliant says those issues will have to wait.
BRILLIANT: I look at this as, like, one chapter in a book. I don't think we're going to complete the trade agreement just by the signing of this phase one agreement. But it's a start in the right direction.
HORSLEY: Still, White House officials remain cagey in committing to even a limited trade agreement. Ultimately, they say, it'll depend on whether the president wants a deal.
Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.