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

Partial China Deal Could Include October Tariff Delay

By Evan Ryser

     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: evan.ryser@marketnews.com

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