United States And China Agree To Limited, Phase One Trade Deal
The U.S. and Chinese governments announced on Friday that they had reached a limited “phase 1” trade deal that calls for the United States to suspend tariffs on $160 million in Chinese goods that had been expected to go into effect on Sunday and to rollback existing tariffs. In exchange, the Chinese government agreed to immediately purchase tens of billions of dollars’ worth of U.S. agricultural products, and more than $200 billion in U.S. products over the next two years.
According to a fact sheet from the Office of the U.S. Trade Representative (USTR), the agreement includes policy and transparency commitments related to currency issues. The provision is aimed at addressing “unfair currency practices by requiring high-standard commitments to refrain from competitive devaluations and targeting of exchange rates, while promoting transparency and providing mechanisms for accountability and enforcement.” The fact sheet promised, “This approach will help reinforce macroeconomic and exchange rate stability and help ensure that China cannot use currency practices to unfairly compete against U.S. exporters.”
The two negotiating teams are now engaged in finalizing specific text regarding these commitments. U.S. Trade Representative Robert Lighthizer said he expected the agreement to be signed by him and his counterpart, Chinese Vice Premier Liu He, in early January in Washington and released publicly then. Ambassador Lighthizer said he also expects the pact will come into effect 30 days after the signing.
Also last week: President Donald Trump announced on Twitter that the United States plans to “begin negotiations on the Phase Two Deal immediately” with China “rather than waiting until after the 2020 Election.”