China says Beijing, US to lift tariff hikes as talks advance

Beijing and Washington have agreed to reduce some punitive tariffs on each other’s goods as talks on ending their trade war progress, a Chinese spokesman said Thursday, removing a possible stumbling block to a settlement.

The agreement came during talks aimed at working out details of a “Phase 1” deal announced Oct. 12. Financial markets were rattled by reports China was pushing for tariffs to be lifted, which raised the possibility of a breakdown in talks.

Negotiators agreed to a “phased cancellation” of tariff hikes if talks progress, said a Commerce Ministry spokesman, Gao Feng.

“If the two sides achieve a ‘Phase 1’ agreement, then based on the content of that agreement, tariffs already increased should be canceled at the same time and by the same rate,” Gao said at a news briefing.

As for the size of reductions, Gao said that would depend on the agreement.

Governments of the two biggest global economies have raised tariffs on billions of dollars of each other’s goods in the fight over China’s trade surplus and technology ambitions.

That weighs on trade worldwide and threatens to depress global economic growth that already is showing signs of slowing.

The Oct. 12 agreement was modest and details have yet to be put on paper but it was welcomed as a sign of progress toward ending the trade war.