The first phase of a trade deal between China and the U.S. has been agreed upon by both parties. United States Trade Representative (USTR) Robert Lighthizer says U.S. President Donald Trump has “focused on concluding a Phase One agreement that achieves meaningful, fully-enforceable structural changes and begins rebalancing the U.S.-China trade relationship.”
As part of the deal, the United States has agreed to modify its Section 301 tariff actions, with 25 per cent tariffs remaining on approximately $250 billion of Chinese imports which were imposed back in June of this year. The tariffs put on in September, were originally 15 per cent on roughly $110 billion of Chinese goods, and those will now be dropped to 7.5 per cent.
Meanwhile, the additional tariffs of 15 per cent on approximately $110 billion worth of goods that were supposed to be put in place this Sunday will be retracted as per President Trump who said the retraction is due to the signing of the phase one deal.
Edward Lawrence, correspondent for FOX Business Network had a source tell him, “a signing ceremony will not happen with President Xi. There will be a rollout of the agreement by the White House Friday. The Chinese have requested that the language of the deal never be made public.”
“We will begin negotiations on the Phase Two deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!,” the President wrote on Twitter.
Pro Farmer policy analyst weighs in
Pro Farmer’s policy analyst Jim Wiesmeyer says Lighthizer told reporters that China has committed to purchase $16 billion in U.S. ag goods in the first year, up from a 2017 baseline of $24 billion, and that the purchases would be $32 billion of additional products over two years. However, he also commented that China said they would make efforts to get to $50 billion in ag purchases.
Wiesmeyer also says Lighthizer commented that the increase in exports to China would increase total U.S. trade to China by $200 billion over a two-year period.
When asked specifically about the purchases of at least $40 billion in U.S. ag products, Chinese officials did not confirm any such level. Officials would only say that the imports would not disrupt the domestic Chinese market.
According to Wiesmeyer, President Trump told reporters at the White House after the deal was announced that he thought China would hit $50 billion in terms of their purchases of U.S. ag goods. But he did not specify the products or the timeline for such purchases.