World

US, China close to agreeing on ‘phase one’ trade deal

The United States and China are close to agreement on the first phase of a trade deal, US President Donald Trump said on Tuesday, after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.

Mr Trump said Washington was in the "final throes" of work on a deal that would defuse a 16-month trade war, but also underscored Washington's support for protesters in Hong Kong, a sore point with China.

China said it had summoned US Ambassador Terry Branstad on Monday to protest against the passage in the US Congress of the Hong Kong Human Rights and Democracy Act, saying the bill amounted to interference in a Chinese internal matter.

"We're in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever.

"It's going very well but at the same time we want to see it go well in Hong Kong," Mr Trump told reporters.

He said he had a very good relationship with Chinese President Xi Jinping, and expected him to ensure a positive outcome in the city of Hong Kong, where pro-democracy parties won 86 per cent of 452 district council seats in Sunday's elections.

"I think that President Xi can make that happen. I know him and I know he'd like to make it happen," Mr Trump said, without elaborating.

Mr Trump's upbeat comments about the trade talks lifted markets, with Wall Street's three major indexes hitting all-time highs on Tuesday. His remarks followed a telephone call on Tuesday by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin with Chinese Vice-Premier Liu disclosed by China's Commerce Ministry.

It said the negotiators discussed core issues related to the phase one deal and reached "a common understanding on resolving relevant problems".

Completion of a phase one deal had been expected in November, but trade experts and people close to the White House said last week it could slide into the new year, given China's pressure for more extensive tariff rollbacks.

White House adviser Kellyanne Conway told Fox News the US and China were "getting really close" on a "phase one" trade deal. She said Mr Trump wanted to "do this in phases, in interim pieces because it's such a large, historic trade deal".

Senate Finance Committee chairman Chuck Grassley, an Iowa Republican, said on Tuesday that he believed the initial deal with China could be done before year end.

He said China had invited Mr Lighthizer and Mr Mnuchnin to visit Beijing for in-person talks and they were willing to go if they saw "a real chance of getting a final agreement." - REUTERS

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