United State and China might agree on a trade agreement that has few restrictions on China's control over its currency's strength. The new trade agreement is expected to heighten trade arguments in Congress and within the Trump Administration.
China and the United States have been in trade friction since last year. The two superpowers have been slapping each other with tariffs. Trade negotiators from each country made a series of meetings to discuss their differences. The recent event gives hope that they might agree on some terms. One of the issues brought by the Trump administration during the negotiations is China's control over the value of its currency. It has long been a major agenda for conflict between China and the United States.
Other nations claim that China unfairly weakened its currency compared to the American dollar and other currencies. The weakened currency gives Chinese firms and factories advantage in selling their goods abroad. China denies the allegations.
Yi Gang, the governor of China's central bank, the statement said that the two sides reached consensus on many key and important issues" about currency markets during high-level trade talks last month. The statement was given at a news conference on Sunday morning.
He added that the consensus included an understanding that both countries would avoid devaluing their currencies to achieve a competitive advantage for their exports and both countries would also continue to comply with previous currency agreements among the Group of 20 economies. He also said that both countries would also maintain close communication about currency markets and would disclose detailed information in accordance with International Monetary Fund standards.
China recently announced that an American delegation headed by Treasury Secretary Steven Mnuchin and the United States Trade Representatives Robert Lighthizer will visit Beijing on March 29-20 to discuss trade. China's Vice Premier Liu He is also scheduled to Visit the United States in early April. According to reports, Liu, Mnuchin, and Lighthizer have been discussing matters via phone since they last met in February. Reports said that the group made some progress on a draft agreement.
American President Donald Trump, however, said that he will no remove the tariffs on China until the country proves its compliance with any trade agreement. The United States is trying to impose on China to live up to its promises during the negotiations. The two sides struggle to agree over an enforcement mechanism in their recent rounds of negotiations.
