President of United States (US) Donald Trump signed off  a "phase one" trade deal with China to halt the Dec. 15 new wave of tariffs on about US$160 billion Chinese goods - Photo by White House

JAKARTA (TheInsiderStories) –  President of United States (US) Donald Trump signed off  a “phase one” trade deal with China to halt the Dec. 15 new wave of tariffs on about US$160 billion Chinese goods. At the beginning, he completion of a phase one deal had been expected to be sign in November.

“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” said the head of states today (12/13).

The official said, the terms have been agreed but the legal text has not yet been finalized. The trade deal is expected to include “a significant increase in Chinese agricultural purchases” in exchange for the US delaying a new round of tariffs scheduled and as much as a 50 percent reduction in existing levies.

Recently, Chinese officials expect Trump to delay the implementing of new tariffs that will take effect on Sunday but White House trade adviser Peter Navaro said that there was no evidence that this rate would not apply.

Earlier, China’ President Xi Jinping has said Beijing wanted a deal with Washington. But, he assured, his country will fight back if necessary against his counterpart Trump’ threat that Chinese imports will face more duties from Dec. 15 if a phase one agreement isn’t inked by then.

Previously, White House is looking at rolling out a previously agreed currency pact with China as part of an early partial deal. The currency accord, which the US said had been agreed to earlier this year before trade talks broke down, would be part of what the Washington considers to be a first-phase agreement with Beijing.

It would be followed by more negotiations on core issues like intellectual property and forced technology transfers, said the report. While, Chinese delegation refuses to talk about forced technology transfers.

In the last meeting, US and China make no progress on key trade issues.  Also indicated that China had offered to increase by 50 percent purchases of agricultural products from US farmers.

The minutes meeting of Federal Open Market Committee saw a little hopes of a trade deal breakthrough this week. It stated, “And seems we have confirmation now that these trade talks are doomed to fail from the get-go and its back to risk-off. AUD versus JPY is down 0.30 percent on the soured sentiment.”

Financial market developments were driven by an escalation in international trade tensions, said the minutes, growing concerns about the global economic growth outlook, and the prospect of more policy accommodation by central banks.

Nominal Treasury yields posted very large declines in August as investors reacted to the US administration’ announcement of additional tariffs on Chinese goods, along with the depreciation of the Chinese renminbi through the perceived threshold of RMB7 per US dollar and the associated implications of these actions for the global economic outlook.

Treasury yields partially rebounded following better-than-expected incoming economic data in the US and abroad, a perceived reduction in the probability of a no‑deal Brexit, and some positive headlines about trade policy. The market-implied path of the federal funds rate shifted down on net.

In August, US officially labeled China a currency manipulator, accusing it of using Renmimbi to gain “unfair competitive advantage” in trade. China’ Yuan has dropped more than 3.5 percent against the Greenback in 2019. More importantly, China allowed Yuan to depreciate beyond RMB7 per US Dollar, drawing Washington’ ire.

by Linda Silaen, Email: theinsiderstories@gmail.com