U.S. and China inch towards phase-one trade deal

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The White House and Beijing seem close to the first part of a trade deal.

It's taken 18 months of tit for tat, trading tariffs on hundreds of billions of dollars of exports

And fiery tweets.

It's agreed 'in principle' - but are they both on the same page?

Reuters correspondent Ryan Woo has followed the ups and downs of this trade war since the beginning.

[RYAN WOO SAYING:]

What we are waiting for is news on where and when the Phase 1 deal will be signed, Trump said that this could happen very soon. U.S. Treasury Secretary Steven Mnuchin said that this will likely happen in early January.

Under the deal, the United States would agree to dial back some tariffs so long as China buys a lot more of America's farm products, energy and manufactured goods.

Everything from pork - a Chinese staple - to avocados.

But it's not so straightforward.

[RYAN WOO SAYING:]

So under the Phase 1 deal, China essentially has to more or less double its purchases of US farm goods. Now, many people have asked like, so how exactly is China going to double its U.S. agricultural purchases? Is China supposed to buy things that it doesn't need?

It may seem like both sides are haggling over small details.

But the stakes here are high.

For Beijing its dealing with this as its economy grows at the slowest in 30 years.

[RYAN WOO SAYING:]

One thing that people should remember is that China does not want a trade war with the US. China has said many times that it doesn't want a trade war. Why? The reason is because China is in the middle of a long term restructuring of its economy. So China is trying to move away from polluting heavy industries and in its place build a high tech manufacturing base. And in the middle of this restructuring, China's economy is going to slow and China's economy is slowing. And a trade war with the U.S. would only complicate this restructuring. And China would rather not be distracted by this or as well.

How China fulfills its end of the bargain of phase one will determine the delicate waltz of the trade talks in the year ahead.

[RYAN WOO SAYING:]

Sometimes things can be very fluid and sometimes things can be very unpredictable. I mean, especially when it comes to Trump. He may sent out a tweet in the middle of the night, and that changes the atmosphere and the tone of the trade talks. And then it's back to square one again.

It's not all just about trade.

The details known about of "phase one" are few the U.S. says its 86 pages long.

But Washington does say it includes stronger legal protections in China for patents, and ways to fight infringement online.

[RYAN WOO SAYING:]

[00:06:10] I think the main thing to to understand is that both sides do not want the deal to fall apart. And from from the signs and signals that we can all see, China doesn't want the deal to fall apart. I mean, it wants the deal to be done so that you can focus on solving its own economic problems at home. And for Trump, we are heading into an election year and a reescalation of the trade war would only distract him, more than anything.