US, China reach deal to remove tariffs: Beijing

The US and China have reached an interim trade agreement that includes the removal of tariffs imposed by Washington, the Chinese government said today.

The interim deal includes commitments by Beijing to purchase more US agricultural products and open China's financial services sector to competition, in exchange for a phased rollback in US tariffs, according to Chinese deputy commerce minister Wang Shouwen.

The US administration has yet to confirm the details, although President Donald Trump said yesterday the parties are close to finalizing the deal. Trump tweeted today ahead of the Chinese government announcement that reports of a rollback in tariffs were incorrect.

The trade war between the world's largest two economies has remained a drag on oil demand outlook, and uncertain prospects of resolving it have added volatility to crude futures markets in recent months. Nymex January light sweet crude futures increased by 42¢/bl to $59.18/bl yesterday on news of progress on an interim deal on trade.

Tariffs in place affect more than two thirds of US imports from China, with retaliatory measures imposed by Beijing affecting nearly similar volume of China's imports from the US.

The US administration has indicated previously it was ready to delay the next scheduled round of tariffs on 15 December, covering an additional 30pc of the volume of US imports from China.

The 15 December round of tariffs would have had the strongest direct effect on US consumers, as it would affect items for which China accounts for more than 75pc of US imports. The US Trade Representative's office said previously it would work to prevent negative effects on US consumers of those tariffs.

Delaying the December round of tariffs on imports from China would be the equivalent of a 0.2 percentage point boost to global GDP growth, based on analysis by IMF economists earlier this year.

By Haik Gugarats