China, US agree tariff rollback in Phase 1

Jeff Mason and Yawen Chen
China and the US have agreed to roll back tariffs as part of talks to end a trade war

China and the United States have agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed, officials from both sides say.

But Thursday's announcement has sparked division among some advisers to President Donald Trump.

The Chinese commerce ministry, without laying out a timetable, said the two countries had agreed to cancel the tariffs in phases.

A US official, speaking on condition of anonymity, confirmed the rollback would be part of the first phase of a trade agreement that is still being put to paper for Trump and President Xi Jinping to sign.

That pact could still fall apart. US officials said a lot of work remained to be done when Trump announced the outlines of an interim deal last month.

Trump has used tariffs on billions of dollars of Chinese goods as his primary weapon in the protracted trade war between the world's two largest economies.

The prospect of lifting them, even in phases, has drawn fierce opposition from advisers in and outside of the White House who remain wary of giving up a key aspect of US leverage.

US stocks pared gains after Reuters reported that the plan faced internal opposition.

"There is no specific agreement for a phased rollback of the tariffs," said Michael Pillsbury, an outside adviser to Trump.

"The American side has been ambiguous when and which tariffs will be lifted. The Chinese have some wishful thinking and are trying to soothe their domestic hardliners that the tariffs will someday come off."

If an interim deal is finished and signed, it is widely expected to include a US pledge to scrap tariffs scheduled for December 15 on about $US156 billion worth of Chinese imports, including mobile phones, laptop computers and toys.

Tariff cancellation was an important condition for any agreement, Chinese Commerce Ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other's goods to reach the phase one pact.

"Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations," Gao told a regular briefing.

A spokesman for the US Treasury department declined to comment and the US Trade Representative's office did not immediately respond to a request for comment.

Republican lawmakers are urging the Trump administration to tie any tariff rollbacks to Beijing's compliance with specific elements of the agreement.

"The tariffs should be phased out piece by piece as China complies," one congressional source said.

Meanwhile, China's state news agency Xinhua reported late on Thursday that the Chinese customs and Ministry of Agriculture are considering removing restrictions on US poultry imports, banned since January 2015 due to an avian influenza outbreak.