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As the Trump administration’s March 1 deadline for a trade deal with China approaches, with another Xi–Trump summit to follow, it seems almost impossible that a comprehensive agreement will be reached in time. The likely outcome is a punt that defers tariff increases in exchange for ongoing Chinese purchases of U.S. soy and energy.

President Trump and Chinese President Xi Jinping in Beijing, Nov. 9, 2017. Photo: Artyom Ivanov/TASS via Getty Images

The broad contours of China’s current offer have become clearer:

Yes, but: The U.S. wants more structural changes. China apparently hasn’t proposed satisfactory subsidy cuts across China 2025 sectors, nor a credible commitment to scale back informal “buy China” policies. China denies that it requires technology transfers for market access, limiting what it can offer. The U.S., meanwhile, hasn’t offered to buy Huawei equipment or to stop its campaign to dissuade allies from patronizing one of China’s leading companies.

Where it stands: A modest deal that preserves the truce — marked by ongoing talks, the resumption of Chinese purchases of U.S. agricultural goods and a stay on U.S. tariff increases — remains within reach by March 1. That could provide a bridge to a longer-term deal, potentially announced with fanfare at a summit even with key details unresolved.

Between the lines: Further escalation isn’t in the short-run economic interest of either country. Increasing the current 10% tariffs to 25%, as the U.S. threatened, would reduce the purchasing power of U.S. consumers and eat into the profits of U.S. firms with China-centric supply chains. It would effectively be a $30 billion tax hike on the U.S. economy (and more if the scope of the tariffs were broadened).

The bottom line: The prospects of another extension depend on the Trump administration’s endgame — whether rolling back tariffs to maintain the current level of integration, escalating them with a big step toward economic decoupling, or simply holding on through 2020 and leaving the big decisions for a second term or a new president.

Brad Setser is the Steven A. Tananbaum Senior Fellow for International Economics at the Council on Foreign Relations.

Go deeper

Updated 5 hours ago - World

Skripal poisoning suspects linked to Czech blast, as country expels 18 Russians

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Czech police on Saturday connected two Russian men suspected of carrying out a poisoning attack in Salisbury, England, with a deadly ammunition depot explosion southeast of the capital, Prague, per Reuters.

Driving the news: Czech officials announced Saturday they're expelling 18 Russian diplomats they accuse of being involved in the blast in Vrbětice, AP notes. Czech police said later they're searching for two men carrying several passports — including two with the names Alexander Petrov and Ruslan Boshirov.

Indianapolis mass shooting suspect legally bought 2 guns, police say

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The suspected gunman in this week's mass shooting at a FedEx facility in Indianapolis legally purchased two "assault rifles" believed to have been used in the attack, police said late Saturday.

Of note: The Indianapolis Metropolitan Police Department's statement that Brandon Scott Hole, 19, bought the rifles last July and September comes a day after the FBI told news outlets that a "shotgun was seized" from the suspect in March 2020 after his mother raised concerns about his mental health.

U.S. and China agree to take joint climate action

US Special Presidential Envoy for Climate John Kerry waves as he arrives at the Elysee Presidential Palace on March 10, 2021 in Paris. Photo: Chesnot/Getty Images

Despite an increasingly tense relationship, the U.S. and China agreed Saturday to work together to tackle global climate change, including by "raising ambition" for emissions cuts during the 2020s — a key goal of the Biden administration.

Why it matters: The joint communique released Saturday evening commits the world's two largest emitters of greenhouse gases to work together to keep the most ambitious temperature target contained in the Paris Climate Agreement viable by potentially taking additional emissions cuts prior to 2030.