The near-deal between the U.S. and China that fell apart six months ago is now being used as the benchmark to decide how much tariffs should be rolled back in the initial phase of a broader trade agreement, people familiar with the talks said.

The two sides, which are locked in tough—perhaps final—negotiations on a phase-one pact, are discussing linking the size of tariff rollbacks to the preliminary terms set in that failed May deal, according to the people, two of whom said the White House is still debating the precise percentage internally. The Chinese have demanded that all tariffs imposed after May be removed immediately and then tariffs imposed before that be lifted gradually, according to one of the people.

The duties under discussion for a potential rollback include the initial tariffs on some $250 billion in Chinese goods that President Donald Trump imposed last year, according to two people. Some of his advisers had been pushing to keep those in place longer-term, to ensure that China lives up to its end of the bargain, but now are open to partial relief in order to get the phase-one deal signed.

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