The Trump administration on Thursday claims to have reached a phase one trade deal "in principle" with China.
The final decision came after Trump met Thursday afternoon at the White House with top trade advisors led by Trade Representative Robert Lighthizer, Director of the National Economic Council Larry Kudlow, Assistant to the President Peter Navarro, and Treasury Secretary Steven Mnuchin.
Sources cited by CNBC said the administration plans to scrap tariffs on Chinese goods set to take effect Dec. 15 and slash a number of existing duties in half. It proposes cutting existing tariffs on $360 billion worth of Chinese products by 50%.
Previous to this, President Donald Trump took to Twitter to claim the United States is "VERY close" to a "BIG" trade deal with China. He tweeted: "Getting VERY close to a BIG DEAL with China. They want it, and so do we!"
Analysts said the fact Trump is backing down from a promised tariff hike while reducing others seems to indicate non-economic motives are in play. They point the tariffs will make Trump look bad with Christmas around the corner, while giving Trump a new problem atop the impeachment the process now in place at the House of Representatives that might hurt his re-election chances in 2020.
"Trump does not want to do that (tariff hike) right before Christmas. The optics would be terrible," said William Reinsch, a trade expert at the Center for Strategic and International Studies and a former official at the U.S. Department of Commerce.
The Dec. 15 tariffs will automatically go into effect unless an order from Trump stops it. Kudlow said late Tuesday morning no decision has been made.
"Either way we're going to be in a great place ... The president loves them (the tariffs)," said Navarro on Fox Business Network Tuesday. "If we get a great deal, we'll be in a good place as well. But it will be the president's decision. It will come soon."
Chinese exports to the U.S. affected by the Dec. 15 tariffs include industrial products like pesticides and other chemicals. Consumer goods exports to be taxed include mobile phones, Christmas decorations, toys and clothing gave as gifts, handbags, photo albums, video game consoles, computer monitors, silk pajamas, turntables, plastic tableware, woolen bathrobes and jeweled wristwatches. More than $160 billion worth of Made in China goods will be hit by the 15% tariffs on Sunday.
Aside from his advisors, Trump also conferred with a number of business leaders on Thursday. Among these men were Business Roundtable CEO Joshua Bolten, Cummins CEO Tom Linebarger, Stanley Black and Decker CEO James Loree and Union Pacific CEO Lance Fritz.
