- The Washington Times - Thursday, December 12, 2019

President Trump has agreed to an initial trade deal that requires China to purchase a large amount of U.S. farm products in exchange for tariff relief, placing him close to a second significant trade win amid the furor over his pending impeachment.

Mr. Trump personally signed off on the “phase-one” agreement ahead of a weekend deadline for imposing a fresh wave of tariffs on Beijing, according to a person familiar with talks.

Once signed, it will be the first milestone in contentious trade talks that have rattled global markets for over a year and served as one of Mr. Trump’s biggest tests heading into 2020.

Mr. Trump teased the breakthrough with the Chinese earlier Thursday, though by the afternoon it was clear it was a done deal with Beijing.

“They want it, and so do we!” Mr. Trump tweeted while the House Judiciary Committee was grabbing much of the media coverage in Washington with its debate over two articles of impeachment.

The White House had announced the contours of the phase-one deal two months ago, giving global investors hope of relief from tit-for-tat tariffs and other trade obstacles. Yet both sides struggled to fill in the details and sign the dotted line.

The emerging deal is just a small step toward Mr. Trump’s overall goal of a comprehensive agreement to end what he calls China’s unfair trade practices, including state subsidies and theft of trade secrets that have lead to a chronic trade imbalance with the U.S. The president began imposing tariffs in 2018 to pressure China to negotiate more reciprocal terms, in his words.

Critics quickly charged that Mr. Trump’s tariffs would be paid by American companies and consumers, which would hurt the U.S. economy rather than China. But the U.S. economy has remained strong, with low inflation and record-low unemployment rates.

The president and his advisers frequently have suggested a deal with China was imminent, only to see the two sides fail to reach a comprehensive agreement, raising accusations that the administration was trying to juice the stock market. Mr. Trump and Chinese President Xi Jinping were expected to sign the phase-one deal at a summit in South America last month, but the conference was canceled.

Signs of a development with China came on the heels of the White House scoring a victory in another major trade agreement. House Democrats finally agreed this week to approve the U.S.-Mexico-Canada trade deal, which would replace the North American Free Trade Agreement.

The House will likely vote on the agreement next week, with Senate action early next year.

Just last week, Mr. Trump said he might wait until after the 2020 election to strike a deal with China.

Yet Mr. Trump faces a Sunday deadline on China. That’s the day his tariffs would really start to bite, hitting $156 billion in popular Chinese consumer goods such as electronics, toys and clothing.

Sen. Rob Portman, Ohio Republican, said news of a phase-one deal that would slash tariffs is a good sign, especially on the heels of the North American pact.
“However, if China does not comply with this agreement, the administration has the ability to reapply tariffs,” he said.

Indeed, Capitol Hill lawmakers who’d cheered Mr. Trump’s tough stance toward China told him not to give away too much.

The White House may need to preserve “tariff leverage” needed for a broader agreement on the thorniest trade issues, Sen. Marco Rubio, Florida Republican, said on Twitter.

Likewise, top Senate Democrats said Mr. Trump needed to win firm concessions in a phase-one deal. Failure to stand up now, they told Mr. Trump, would leave U.S. companies exposed to China’s trade abuses.

“Failure to secure commitments from the Chinese government to enact substantive, enforceable, and permanent structural reform will jeopardize American jobs and long-term economic prosperity. Without a strong agreement in place, the Chinese government continues to employ an array of predatory trade tactics that severely undermine American workers and businesses,” Senate Minority Leader Charles E. Schumer wrote with Sens. Ron Wyden of Oregon and Sherrod Brown of Ohio.

Wall Street wasn’t so cautious.

Stocks jumped Thursday afternoon on firmer reports that Beijing and Washington had reached the so-called phase-one agreement in principle.

The S&P 500 reached a record close, gaining 0.9% to end the day at 3,168.57. The Nasdaq also posted an all-time closing high, rising 0.7% to 8,717.32.

The Dow Jones Industrial Average climbed 220.75 points, or 0.8%, to close at 28,132.

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