Wall Street was off to the races this morning after Chinese officials announced that the two sides have agreed to roll back tariffs in the future, but there's significant asterisks attached to the announcement.
If current reports are correct, a rollback of tariffs won't be part of "phase one" of Trump's "greatest and biggest deal ever." A partial rollback could come in later phases if talks progress in some meaningful way after "phase one" is signed.
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.
There are additional caveats according to CNBC.
Gao Feng, a spokesperson for China’s Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another’s goods, according to the country’s state broadcaster. [...]
One important condition for a limited trade agreement, Feng insisted, was that the U.S. and China must remove the same amount of charges at the same time.
It's curious to me that this announcement was made by the Chinese before anyone in the White House could their mouth to the press.
I don't know exactly what that means, but it could be an indication that this announcement doesn't necessarily tell us anything we didn't already know.
China is essentially saying that a rollback of tariffs won't be part of "phase one" but tentative rollbacks could come in the future after phase one.
Didn't we already know that?