China signals Phase One deal complete

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Washington still hoped to sign the deal this month, said Kudlow, despite Chile's withdrawal as host of the Asia Pacific Economic Cooperation summit, where Trump and Chinese President Xi Jinping had been expected to ink the agreement.

However, Chilean President Sebastian Pinera announced the cancellation of the summit on Wednesday due to the social crisis facing the South American country.

"We look forward to finalizing Phase One of the historic trade deal with China within the same time frame, and when we have an announcement, we'll let you know", White House spokesman Hogan Gidley said in an email.

But whether the talks go beyond this initial phase, which Trump said was 60% of a broader deal he's seeking, remains a big unknown.

USA and Chinese negotiators have been racing to finalize a text of the "phase one" agreement for Trump and Xi to sign next month, a process clouded by wrangling over US demands for a timetable of Chinese purchases of US farm products.

US Treasury Secretary Steven Mnuchin, who was travelling in the Middle East, told Reuters on Wednesday that US discussions with China had been productive, and work on finalising the text of the deal was continuing.

China has also suggested Macau as a possible venue, said a China source familiar with the issue.

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Adding to the complexity of the relationship between the two countries, the World Trade Organization earlier Friday awarded China permission to impose $3.6 billion in sanctions against the U.S. The case predates the tariff war between the two nations but may add a layer of tension to ongoing talks.

Chinese officials voiced optimism that Beijing and Washington can find a way to clinch the so-called Phase One trade deal next month, despite the abrupt cancellation of the summit where the heads of state were to meet to formally sign the deal. Alaska and Hawaii could be potential options that would be acceptable to Beijing, Reuters quoted a second source familiar with the issue as saying.

According to media reports, the phase one deal includes a willingness by China to address U.S. intellectual property concerns, and to commit to the purchase of some $40-$50 billion in United States agricultural goods hit by the tariff war.

The Trump administration has stalled planned tariff escalations as part of the detente with China, which officials said also involved unspecified commitments on rules for technology transfers and currency management.

The U.S. economy has shown signs of slowing as businesses hold back investments amid uncertainty over the impact of tariffs on hundreds of billions of Chinese goods.

But since the US-China détente this month, broader concerns have surfaced over whether a comprehensive trade deal could be reached.

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