China, US agree to solve core issues
Top trade negotiators for China and the United States discussed solving issues regarding each other's core concerns and reached consensus on properly addressing related issues in a phone call on Tuesday morning, the Ministry of Commerce said.
Analysts said they hope both governments will further enhance mutual trust and seal a partial agreement, as a new study indicated that the US is absorbing the cost of hefty tariffs imposed on Chinese goods.
On Tuesday morning, Vice-Premier Liu He spoke by telephone with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the ministry said in a brief statement. They reached a consensus on properly addressing core concerns, and both sides agreed to maintain communication on remaining issues in the phase one deal, according to the statement.
Negotiating teams for China and the US have been continuing talks since they outlined the preliminary deal in early October. Both nations have made moves in the previous months to ease tensions on such issues as tariffs and food imports. The duties on Chinese goods are collected at US ports by US Customs and have to be paid by the purchaser of the goods. The US purchaser basically pays a sales tax to Customs to import the items.
The study found that prices on imports from China have been relatively stable despite higher tariffs. Prices on goods from China fell by 2 percent in dollar terms from June 2018, right before the first tariffs went into effect, to September 2019. The drop is considered a small fraction of the amount required to offset the increase in tariff rates, some of which are 25 percent. The study also found that imports of Chinese goods carrying tariffs have fallen annually by $75 billion since the second quarter of 2018, while imports of such goods without tariffs have been "roughly stable".
That means US consumers are buying fewer products from China than before, which has affected some industries that rely exclusively on Chinese products for their businesses.
