Oil prices rose by more than 1 percent early on Thursday after U.S. President Donald Trump said that the United States was very close to some sort of a deal with China and as the U.S. has reportedly offered China to roll back some existing tariffs and cancel a new round of tariffs set to take effect on December 15.
Earlier on Thursday, President Trump tweeted “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”
According to people briefed on the protracted U.S.-China trade negotiations by The Wall Street Journal, the U.S. has recently offered to Beijing to reduce some of the current tariffs by as much as 50 percent, if China pledges to buy big volumes of U.S. agricultural products, protect U.S. intellectual property rights, and allow more access to its financial services sector. Otherwise, there would be no ‘phase one’ deal, according to the WSJ’s sources.
“The ball is in China’s court now,” one of the people briefed on the American offer told the Journal.
If the U.S. and China don’t reach some sort of agreement by midnight this coming Sunday, the U.S. could slap tariffs on another US$156 billion worth of goods that America imports from China, mostly consumer products, including laptops, mobile phones, toys, and clothing.
President Trump has not announced yet whether he would follow through or delay the December 15 tariffs, and he is expected to meet later on Thursday with his economic team to discuss the state of the trade negotiations with China.
Although previous ‘pledges’ in those negotiations haven’t stuck, even a small and partial ‘phase one’ deal with China could alleviate market and investors’ concerns about flagging global economic growth and, as a consequence, global oil demand growth.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Canada's Oil Crisis Isn't As Bad As It Seems
- Big Oil’s Wishlist: The Hottest Oil Auctions In 2020
- Chevron’s $11 Billion Write Down Is A Warning For The Oil Industry