Rollback of China tariffs faces fierce opposition in White House

By Heather Timmons and Jeff Mason

WASHINGTON (Reuters) - An agreement between the United States and China to roll back existing tariffs as part of a "phase one" trade deal faces fierce internal opposition in the White House and from outside advisers, multiple sources familiar with the talks said.

The idea of a tariff rollback was not part of the original October “handshake” deal between Chinese Vice Premier Liu He and U.S. President Donald Trump, the sources said.

Chinese officials said earlier on Thursday that tariff reductions had been agreed, and a U.S. official confirmed that was the case early Thursday afternoon.

But there is a divide within the administration over whether rolling back tariffs will give away U.S. leverage in the negotiations, current and former administration officials said.

The Chinese Communist Party is trying to "re-trade" the agreement, said Stephen Bannon, former White House adviser. He added that rolling back earlier tariffs “goes against the grain” of the original October agreement.

“There’s nothing that Trump hates more” than someone backtracking on a deal, he said.

No one inside the White House would go on the record to confirm the division, and the United States Trade Representative's office has not commented on whether or not there will be tariff rollbacks.

This is “very like” Beijing, said Christian Whiton, a former adviser in the Trump administration on East Asia issues. China’s Communist Party is a using a “hyper-aggressive negotiation strategy of trying to redefine reality,” he said.

“At the end of the day, Trump is the original hawk” on China trade, said Whiton. “I would be very surprised” if he agreed to this.

(Reporting by Heather Timmons and Jeff Mason; Editing by Chizu Nomiyama and Dan Grebler)

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