China and the United States are in the final stages of completing a trade agreement, with Beijing offering to lower tariffs and other restrictions on US farm, chemical, auto and other products, and Washington is considering removing most, if not all, sanctions that are taken against Chinese products since last year.
The deal takes shape after February's lecture in Washington, people who are informed about the matter on both sides, said. They warned that obstacles remain, and each side faces possible resistance at home, that the terms are too favorable for the other side.
JOHN FUND: WILL CHINESE USE STEEL COMPANY DEAL TO STEAL SECRETS?
] Despite the remaining obstacles, talks have gone to the extent that a formal agreement could be reached at a summit between President Trump and Chinese President Xi Jinping, probably on March 27, after Xi completed a trip to Italy and France, individuals with knowledge of the plans said.
As part of an agreement, China promises to help smooth out the game space, including increasing the timetable for removing foreign car ownership restrictions and reducing tariffs on imported vehicles below today's 1[ads1]5% Auto tariff.
Beijing would also increase purchases of US goods – a tactic designed to appeal to President Trump, who struggled to end the bilateral trade deficit with China. One of the sweeteners would be an 18,000 billion natural gas purchase from Cheniere Energy Inc., people familiar with the transaction said.
CHINA BANNER 23 MILLIONS FROM TRAVELING AS PART OF CITIZENS 'REPORT CARD SYSTEM
The two sides continue to negotiate cases involving Chinese industrial policy, arguing the United States, giving Chinese domestic businesses an advantage, especially state-owned enterprises. Last week, US trade representative Robert Lighthizer said the intellectual property protection provisions totaled nearly 30 pages out of a 100-page work document.
U.S. And Chinese dealers are also working to set up a mechanism to address complaints from US companies. The plan being discussed requires bilateral meetings with officials from both countries to settle disputes. If these conversations do not agree, Mr. Lighthizer has said that the United States could impose tariffs.
LOSS OF HANOI SUMMIT MAY BE WIN IN TRADE: EXPERT
Others involved in the talks said the US is pushing Beijing not to accept – at least in some cases – if the United States imposes sanctions. It would be a great concession for Beijing dealers, who say they will make sure that the deal does not turn out to be a different treaty for China of the type imposed by Western forces in the 19th century.
Nevertheless, China hawks in the United States are concerned that enforcement measures may not be strong enough and will bind the United States in endless conversations.
"The whole process is a fraud," said Derek Scissors, a Chinese expert at the American Enterprise Institute, claiming that the United States could better enforce its will by taking unilateral actions rather than being hooked on consultations. Former White House strategist Steve Bannon urged the administration to increase tariffs to push China to accept tougher conditions, even though it entailed longer negotiations and market security.
"For Trump to get the structural reforms he wants and the country's needs can take the rest of 2019 to negotiate, Mr. Bannon says.
It is not yet clear whether conservative US media that has Mr. Trump's ear will
For the Chinese, who connect the visit to Florida to Mr. Xi's European tour is a way to blunt the impression that he is traveling directly to Mr. Trump's property to make concessions.
In recent weeks, Xi claimed senior officials from all over China to warn them of "major risks" to the world's No. 2 economy, and his administration issued new party leaders demanding "unity and concerted action. "
XI FIRMLY IN CHARGE AS CHINA TURNS TO LEGISLATIVE SEASON
A test by Mr. Xi's writer will unfold over the next two weeks, when about 3,000 lawmakers gather in Beijing to look at the government's financial plan for the year.
A wild card in negotiations between the United States and China is the impact of Mr. Trump's failed summit in Vietnam with North Korean leader Kim Jong Un. US officials said they hope Mr. Xi learns from the episode that Mr. Trump would reject a deals he considers inadequate, but they fear that Beijing may take the opposite lesson: that Mr. Trump is desperate for a victory.
"His lack of agreement in Vietnam increases the pressure on him to get an agreement with the Chinese , "said Fred Bergsten, founder of the Institute for International Economics in Washington.
Both sides also acknowledge the need to win domestic support. China's Vice President Liu He, the Xi's manager, has held meetings with various ministries. r and agencies to build consensus in a bureaucracy that is anything but monolithic.
Herr. Lighthizer, meanwhile, plans to go to Michigan this week to speak to United Auto Workers. He told Congress last week that he had been trying to incorporate specific requests from labor, business, farmers and lawmakers into a deal.
Any deal is likely to be welcomed by markets, which have risen to the news that the chance of an end to the Trading Battle increased. But given the administration's heated rhetoric on China-Mr. Lighthizer last week said he considered Beijing an existential challenge for the United States. The provisions have already been criticized as insufficient, especially measures to restore Chinese industrial policy.
In a move that would strengthen the administration's claims of the benefits of an agreement, the state-owned China Petroleum & Chemical Corp., known as Sinopec, would agree to buy $ 18 billion of liquid natural gas from Cheniere. People who knew the transaction said.
Cheniere would start delivering LNG to the Chinese counterpart as soon as 2023 Chinese banks could offer financing as part of the $ 3 billion deal to build additional facilities to meet demand. The agreement is still under negotiation and is not completed.
"It would be a strong signal that there will be others (contracts) to follow," said Charlie Riedl, CEO of the Center for Liquefied Natural Gas, a trade association.
China has hit US LNG with 15% tariffs, as part of the trade battle, and has bought the product mainly from Qatar, Australia and Malaysia.
Other purchases include soybeans and other agricultural products. In recent talks, Beijing has also discussed the reduction of tariffs and other barriers that have limited sales of chemicals and agricultural products from America, such as ethanol, which is now facing 70% Chinese retaliatory tariffs. an ethanol by-product, dried distillate grains, used to feed cattle; and polysilicon, a raw material in solar panels that were hit with 57% tariffs as part of a previous trade battle with China.
Herr. Trump on Friday tweeted that he asked Beijing "to promptly remove all Tariffs on our agricultural products (including beef, pork, etc.)" in part because he raised plans to raise tariffs of $ 200 billion of Chinese goods last week. 25% from 10% on March 2 as planned.
CLICK HERE TO GET FOX NEWS APP
There has been less progress in other issues that share the two nations, especially China's industrial policy and subsidies. Beijing believes the support is crucial to its state-led development plan and maintains the rule of the Communist Party.
Yang Guangpu, an associate researcher at the Development Research Center, a think tank under the Chinese government, said Beijing is taking steps to enable state-owned companies to operate more as commercial entities.
"China is carrying out reforms in an orderly manner, and will not change the pace of trade tensions with the United States," Mr. Yang said.  Beijing has promised to remove "market-distorting" subsidies, people who track the negotiations said, but some in the administration consider it insufficient because Beijing does not specify its subsidies at the state and local level, and specify which ones it will eliminate.
This story was originally published by the Wall Street Journal.