Top U.S. and Chinese negotiators held phone talks and agreed to keep in touch over “remaining issues” for a “phase one” trade deal between the two countries, Xinhua news agency reported. U.S. President Donald Trump had announced last month that the two sides had reached an initial agreement, but the deal is yet to be finalized. “The two sides have basically reached broad consensus for the phase one agreement,” Gao Lingyun, Expert at the Chinese Academy of Social Sciences (CASS) in Beijing, who is close to the trade talks, told the Global Times, noting that the two sides are still moving closer to reaching a phase one deal soon, unlike the “contradictory information” in media reports, which suggested that both sides were not close to reaching a deal. China keeps insisting that a roll-back of tariffs must be part of the phase one deal, but both sides still do not agree on reducing which tariffs by what amount. In an article in the People’s Daily, Vice Premier and chief trade negotiator Liu He called for improved IPR protection, market reforms and fairer competition. If no agreement can be reached by December 15, President Trump is expected to place additional U.S. tariffs on Chinese goods.

In a new setback for China-U.S. relations, U.S. President Donald Trump signed the Hong Kong Human Rights and Democracy Act of 2019 into law. “We strongly urge the U.S. side not to implement the act to avoid affecting China-U.S. relations and bilateral cooperation in key areas,” Foreign Ministry Spokesman Geng Shuang said. When asked about details of Chinese countermeasures, Geng said they will be made known to the public, but did not say when. Vice Foreign Minister Le Yucheng summoned U.S. Ambassador to China Terry Branstad, saying the U.S. side must bear all the consequences resulting from China’s resolute countermeasures.

“Global growth slowed considerably in 2019, and we do not expect much improvement in 2020. Trade tensions have created an extra challenge for manufacturing and trade reliant economies, while heightened geopolitical risk and domestic policy unpredictability cast long shadows in many parts of the world,” according to DHL, which released its Global Trade Monitor. It aggregates large amounts of data to provide quarterly outlooks for early-cycle commodities such as brand labels for clothes; bumpers for cars and touch screens for mobile devices; containerized ocean freight and air cargo traffic, commented Moody’s. Its report showed China’s growth outlook at its weakest point since 2016, suggesting that the positive traction from the latest PMI may not be lasting. “Exports of consumer fashion goods are spiraling down from moderate growth to deflation. High technology, personal and household goods, machinery parts and industrial raw materials remain lackluster,” read the report.

On its Liberty Street Economics blog, the Federal Reserve Bank of New York concluded that “U.S. wholesalers, retailers, manufacturers, and consumers are left paying the tax,” referring to the import tariffs. “Tariffs are collected at the port of entry by the U.S. Customs, with the duty paid by the immediate U.S. purchaser of the goods. In effect, the U.S. purchaser pays a sales tax to the Customs Service for the right to import the good,” the Federal Reserve Bank writes. The blog post is available here. The blog also shows that China’s market share in the U.S. has already fallen by roughly 2 percentage points for machinery and electrical equipment, and by close to 6 percentage points for electronics.

Meanwhile, the U.S. Federal Communications Commission (FCC) decided to bar U.S. telecom companies from using federal funds to buy products from Huawei and ZTE due to so-called “threats to national security.” “The U.S. has a habit of abusing state power to suppress specific countries and companies on trumped-up charges without providing any evidence. It once brought down Alstom and now wants to crush Chinese companies,” Foreign Ministry Spokesman Geng Shuang said. “Such economic bullying behavior by the U.S. side is a blatant denial of the principles of the market economy that the U.S. has always advocated,” he added. Geng urged the U.S. side to stop misuse of national security, stop deliberate smears and accusations against China, and stop unreasonably suppressing Chinese companies. The U.S. should provide a fair, just and non-discriminatory environment for Chinese enterprises to conduct normal business activities in the United States, he concluded.