The Trump administration has offered to scrap its next round of tariffs on Chinese goods set to take effect Sunday and slash some existing duties in half, two sources told CNBC.
The development signals the White House’s willingness to rein in a trade war between the world’s two largest economies that threatens to drag on global growth. The U.S. proposed cutting existing tariffs on $360 billion in Chinese products by 50%.
The White House offer to Beijing, first reported in The Wall Street Journal on Thursday, came last week and may have changed. Recent talks have taken place mostly at the deputy level.
Hours before a meeting with his top economic advisors Thursday about whether to cancel the upcoming tariffs, President Donald Trump signaled more optimism about an agreement with China. He tweeted that the U.S. has moved close to a trade deal with Beijing after several false starts and near misses.
“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” the president wrote.
Trump’s acknowledgement that the U.S. wants a deal marks a shift in tone from recent weeks. He has repeatedly contended that Beijing needs an agreement more than Washington does, and suggested he was content waiting until after the November 2020 election to strike a deal.
Duties of 15% on about $160 billion in consumer goods are set to take effect on Sunday, including on Chinese-made toys, computers, phones and clothing.
Major U.S. stock indexes jumped following Trump’s tweet. Investors hope the U.S. and China can reach an accord before the tariff deadline and avoid a potentially damaging escalation in their nearly 2-year-old trade war.
Trump in October announced a partial “phase one” agreement with China as the world’s two largest economies try to rein in the economic conflict. Washington and Beijing have so far failed to sign the agreement, which would have involved increased Chinese purchases of U.S. agricultural products and possible tariff relief.
During months of trade talks with China, the president has previously touted progress before discussions crumbled. He has repeatedly said the negotiations are going well, even as trade officials struggled to reach a deal.
The Office of the U.S. Trade Representative did not immediately respond to a request to comment.
Trump wants a broad trade agreement with China to address concerns about intellectual property theft, forced technology transfers and trade deficits. The president, who promised to crack down with China during his 2016 campaign, sees an agreement as an economic and political priority ahead of his 2020 reelection bid.
Not all of Trump’s advisors want to back off the planned duties. China hawk Peter Navarro, under the pseudonym “Ron Vara,” wrote a memo supporting the White House’s tariff strategy.
In the document obtained by CNBC on Wednesday, he wrote that tariffs “are working to defend [the] economy and have had no negative impacts on growth or stock market rise.”
— CNBC’s Kayla Tausche contributed to this report