Trade deal may offer only short respite from US-China tensions, observers say

Interim deal unconfirmed despite reports in US that Washington was set to cancel new tariffs and Beijing would buy US$50 billion of US goods

Agreement could give China time to stabilise economy and win Donald Trump support for his presidential election campaign

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A deal with China could give Donald Trump a boost in next year’s US presidential election. Photo: Reuters

Published: 10:01pm, 13 Dec 2019Updated: 5:57am, 14 Dec 2019

Reaching an interim trade deal could ease tensions between China and the United States for the time being but would not necessarily bolster relations in the long run, according to diplomatic observers.

A so-called phase one agreement may offer only initial relief as both countries’ governments face uncertainties at home, the observers said, cautioning that some of the remaining points of dispute were likely to resurface in subsequent talks, along with the unpredictability of US President Donald Trump.

Although there were rallies and upbeat sentiments across global markets on Friday after US reports that consensus on an agreement had been reached, there was no official confirmation of a deal from either side. It was unclear, for example, what agricultural purchases Beijing and Washington might agree, observers said.

China’s Ministry of Foreign Affairs fell short of confirming that an agreement had been reached on Friday, its spokeswoman saying only that China was committed to resolving trade disputes through dialogue and that any deal should be “mutually beneficial for both sides”. The White House was reported to be making an announcement late on Friday.

Observers said an interim deal to alleviate the 18-month-long trade tensions would be welcome for both sides, giving China respite to stabilise its economy and Trump a chance to gain farmers’ support for his presidential re-election campaign next year.