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Trump administration officials have discussed offering a limited trade agreement to China that would delay and even roll back some U.S. tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases, according to five people familiar with the matter.
Some of President Donald Trump’s top trade advisers in recent days have discussed the plan in preparation for two rounds of face-to-face negotiations with Chinese officials in Washington, due to take place in coming weeks, the people said.
The discussions are preliminary, and Trump has yet to sign off on it.
The proposal also would be an interim deal, which would freeze the conflict, rather than bring a final resolution to a trade war that has cast a shadow over the global economy. U.S. stocks advanced on the news.
The plan reflects concerns within the White House over the recent escalation in tariffs and their economic impact on the U.S. going into an election year. Polls show the trade war is not popular with many voters, and farmers are increasingly angry over depressed commodity prices.
One of the main goals is to strike a deal that would allow the administration to avoid going ahead with more tariffs in December that would hit consumer products ranging from smartphones to toys and laptop computers. Also in play is a further delay in a tariff-rate hike due to take effect in October.
Exact details of a possible deal, such as what specific commodities and how much China will buy and when, still need to be worked out. But the idea is that the deal would include IP commitments that China had agreed to in negotiations in the spring before talks broke down, leading to a summer of escalation.
When those talks fell apart in May, the sides were circulating a 150-page draft agreement, and White House officials have repeatedly said they were 90% of the way to securing a deal.
China has insisted throughout the negotiations that any deal would have to see a withdrawal of U.S. tariffs.
It’s not clear if special licenses for Huawei Technologies Co. will be part of the deal, two of the people said, citing congressional worries over national security issues related to the Chinese company. China has made clear throughout the negotiations that it wants the U.S. to remove the company from its export blacklist and denies claims that Huawei was spying for the Chinese government.