The United States is demanding regular reviews of China’s progress on pledged trade reforms as a condition for a trade agreement but could again resort to tariffs if Beijing is deemed to have violated the agreement, according to sources.
“The threat of tariffs is not going away, even if there is a deal,” said one of three sources briefed on the talks who spoke with Reuters on condition of anonymity.
Chinese negotiators were not keen on the idea of regular compliance checks but Washington’s proposal “didn’t derail negotiations,” the source said.
A continuing threat of tariffs hanging over commerce between the world’s two largest economies would mean a deal would not end the risk of investing in businesses or assets that have been impacted by the trade war.
A process involving enforcement and verification of trade reforms is unusual for trade deals and is similar to the process around punitive economic sanctions such as those…