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Thursday, October 10, 2019 - 13:57

MNI POLICY: US Chamber of Commerce Says China FX Deal Possible

Partial China Deal Could Include October Tariff Delay

WASHINGTON (MNI) - The United States Chamber of Commerce said the U.S. and China are making progress in trade talks and could be working toward an "early harvest" deal on intellectual property, market access, and agricultural purchases, with the possibility of a currency deal this week.

"There is even the possibility of a currency agreement this week. I think that could lead to a decision by the administration not to put forward a tariff rate hike on October 15th," Myron Brilliant, executive vice president and head of international affairs at the Chamber, said Thursday in a call with reporters.

"There's progress that could be made this week on IP, market access, on ag purchases," Brilliant said, adding the Chamber will continue to push for a "high-standard, comprehensive agreement that we need." While the larger deal isn't coming this week, progress now sets up a potential meeting of President Xi Jinping and President Donald Trump at APEC in mid-November, he said. China knows it can't just ride out Trump's term in office, he said.

"The good news is that the Chinese understand that waiting is not an option, waiting out the present term is not an option, that this is a bipartisan issue," he said. Brilliant said he has spoken with China's Liu He about the talks, and Trump earlier today tweeted he will meet with the Vice Premier tomorrow.

Brilliant expressed hope about getting back to a framework where the two parties use the negotiating text from May, before talks broke down triggering months of tit-for-tat tariffs. "A consensus exists even in the business community about the need for progress in the trade relationship, that China has areas that they have to address," he said.

Brilliant, noting the uncertainty for business in the U.S. and for international investment, argued a top priority for the administration should be to prevent further tariffs. A complete spilt in the U.S.-China relationship should also be off the table. "Decoupling is not an option, it is not an option for the United States or China," Brilliant said.

"There is a threat, of course, of some decoupling if we give up on trade negotiations and we accept increased isolationism," he said.

Furthermore, Brilliant indicated the Chamber will not support delisting Chinese companies from American stock exchanges.

Brilliant acknowledged "legitimate and long-standing" issues related to transparency of Chinese companies but said the SEC and its Chinese counterpart have been in talks to address the issues.

"We've been clear that we want to encourage investment both ways as investment draws benefits to both economies," Brilliant said. "We don't want to see capital controls and we don't want to see restrictions, but we understand that these issues are caught up in the broader narrative of the trade talks."

--MNI Washington Bureau; +1 202 371 2121; email:

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