Trump Approves U.S.-China Trade Deal, Tariffs Suspended on December 15
Bloomberg News reported on Thursday that US President Trump approved the “Phase 1” trade agreement with China that day, which would stop the US from exporting US $ 160 billion of Chinese goods to the United States. The taxation measures originally scheduled to take effect on December 15.
The report quoted US officials as saying that the agreement includes part of the U.S. tariff reduction measures on China and a suspension of a new round of tax measures on China on December 15, while China agreed to purchase 50 billion U.S. agricultural products in 2020. It is reported that the content of the trade agreement reached between the United States and China may include more narrow scope than the content listed in the “first stage” trade agreement announced by Trump in October this year. .
A former senior US trade negotiator said that since the text version of the agreement between the two sides has not yet been implemented, how the text version will write the agreement in detail is of vital importance. The former official said, “Written documents are very important in trade negotiations, especially because often some differences between the two sides will be highlighted.” A source said Trump has ratified the agreement and the White House will announce it soon. According to US Department of Agriculture data, before the outbreak of the trade war in 2017, China purchased 24 billion U.S. agricultural products throughout the year.
According to Pillsbury, “Trump is pleased and excited about his breakthrough.” Pillsbury is a scholar on China at the Hudson Institute, which advises the Trump administration.
Trump stressed that the so-called first-phase agreement will also include measures to improve intellectual property protection, measures to open China’s financial services market, and measures to prevent exchange rate manipulation, and it is expected that the agreement will promote the two parties to reach a second-phase agreement. The second phase of the agreement will address more difficult issues, including mandatory technology transfers, subsidies, and behavior of Chinese state-owned enterprises.
Trump announced two months ago that the United States and China have agreed on the framework of a limited agreement to stop the trade war and start negotiations at a possible future stage. However, it turned out that until Thursday, efforts to finalize the relevant provisions were quite uncertain, and a few days later, new tariffs on iPhones, toys and other consumer goods would take effect.
Trade groups welcomed the progress made on Thursday as it helped to mitigate the effects of additional taxes at the border. Importers, retailers and other U.S. companies are concerned that more tariffs could cause prices to rise or hurt sales.
“We welcome the news that the United States and China will soon reach a first phase agreement,” said Myron Brilliant, executive vice president and director of international affairs at the US Chamber of Commerce. “This will bring stability to US-China relations, but there is no doubt that there is still much work to be done in the future, and there are still more issues to be resolved.”
Florida Republican Senator Marco Rubio, who is clearly critical of China, said on Twitter: “The White House should consider the risk that a short-term agreement with China could cause the U.S. to lose ground with China on the most important issues The tariff bargaining chips needed for broader agreements include issues such as Chinese government subsidies to domestic companies, mandatory technology transfers, and preventing American companies from entering key industries. ”
Senate Democratic Leader and New York State Democratic Senator Chuck Schumer led a Democratic draft letter that said, “If the Chinese government cannot be committed to substantive, enforceable, and permanent structural reforms, Will endanger US employment and long-term economic prosperity. ”
The White House did not comment on the pending agreement.
On Thursday morning, Trump tweeted: “A major agreement with China is about to be reached. They want it, we want it too!”
If the United States and China confirm and sign a limited trade agreement, it will indicate that the Trump administration is eager to keep its promise to reach a new agreement with trading partners at a time when the 2020 election is imminent and Trump may be impeached.
House Democrats said on Tuesday they had reached an agreement with US and Mexican officials on a revised version of the North American Free Trade Agreement, which is expected to be approved by Congress in the coming months.
If the first-phase agreement with China is reached, it will only solve a small part of the US complaints against China’s trade behavior. Fundamental issues such as government subsidies and China’s pressure on American companies to share technology will remain largely untouched. Many in the US business community still doubt whether the second or third phase of the agreement negotiations will be fruitful.