US and China set to sign 'phase one' trade deal

Trump and Chinese leader Xi Jinping.
Trump and Chinese leader Xi Jinping. Photo credit: File

Donald Trump says he will sign the first phase of a trade deal with China at the White House in January.

The US President said on Tuesday he will travel to Beijing at a later date to open talks on other sticking points in the US-China trade relationship.

He tweeted from his Florida home: "I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15. The ceremony will take place at the White House."

He said high-level Chinese government officials will attend the signing.

In the first-step agreement, which is smaller than the comprehensive deal Trump had initially wanted, the US dropped its plan to impose new tariffs on US$160 billion of Chinese imports starting earlier this month.

Such a move would have been likely to lead to higher prices for many consumer goods as Americans shopped for gifts during the holiday season.

The Trump administration also agreed to cut existing import taxes on about US$112 billion in Chinese goods from 15 percent to 7.5 percent.

In return, the US said China agreed to buy US$40 billion a year in farm products over two years, even though US agricultural exports to China have never exceeded US$26 billion a year.

Beijing also committed to ending a long-standing practice of pressuring companies to hand over their technology as the price for gaining access to the vast Chinese market.

China also agreed to lift certain barriers to its markets for such products as beef, poultry, seafood, pet food and animal feed, according to US officials.

But the initial agreement left some major issues unresolved, notably complaints that Beijing unfairly subsidises its own companies to give them a competitive advantage in world markets.

No detailed paperwork on the agreement has been released, and China has yet to confirm the dollar amount of US farm goods it has pledged to buy.

Both sides have said they've been waiting for text of the agreement to be translated between Chinese and English.

The US launched a trade war against Beijing a year and half ago over allegations of unfair trade practices, such as theft of US intellectual property and subsidies that unfairly benefit Chinese state-owned companies.

The United States Trade Representative said the Phase 1 deal includes stronger Chinese legal protections for patents, trademarks, copyrights, including improved criminal and civil procedures to combat online infringement, pirated and counterfeit goods.

Issues such as industrial subsidies would be addressed in a later deal, US authorities said.

The escalating tit-for-tat tariffs, which began in July, 2018, have roiled markets and crimped economic growth worldwide.

Reuters

 

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