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November 5, 2018

Will The United States And China Reach A Trade Deal, Or Won’t They?

Is the United States closer to a plan to reduce trade tensions with China, or is the trade battle about to get even more heated? News reports differed last week.

Early in the week, Bloomberg reported that the United States was preparing to add tariffs to all remaining Chinese imports—or about $257 billion worth of products. Those tariffs would be on top of the $250 billion worth of Chinese goods already subject to U.S. tariffs.

On Thursday, however, the White House reveled that President Donald Trump and Chinese President Xi Jinping talked by telephone for the first time in six months and cemented their plans to meet at the G20 summit that will be held in Argentina later this month. On Twitter, President Trump even said he “had a productive conversation with Chinese President Xi Jinping on trade and North Korea …”

The same day, Chinese Premier Li Keqiang told a delegation of members of the U.S. House and Senate who were visiting Beijing that he hopes the United States and China “will meet each other halfway and work together in the spirit of mutual respect and equality.” Li said he believes the two countries will “overcome differences and have the wisdom to overcome the obstacles and move our relationship forward on an even sounder track.”

According to Bloomberg, after his discussion with President Xi and the premier’s comment, President Trump asked members of his cabinet to begin drafting a trade deal with China.

The back and forth with China came shortly after the U.S. Department of Commerce revealed the United States’ goods trade deficit with China grew 12 percent to $115.6 billion in the third quarter. The U.S.-China Economic and Security Review Commission said the deficit grew as “importers rush[ed] orders as tariffs begin to bite.”