U.S., China to sign 'phase one' trade agreement

Supporters at President Trump’s campaign rally in Toledo said the president delivered a victory in the trade war with China

Chinese firms will buy American products based on market conditions, both countries should create favourable conditions for Chinese purchases of U.S. products, China's Vice Premier Liu He said during the signing ceremony of the phase-one trade deal at the White House on Wednesday.

At last count, the Trump administration had imposed tariffs on $550 billion worth of Chinese products, while China had imposed tariffs on $185 billion worth of U.S. goods.

However the majority of tariffs remain in place, prompting business groups to call for talks to continue.

With the November election looming, Mr Trump is keen to showcase his proficiency in the art of the deal but today's accord fails to address his main gripe when he first imposed tariffs in July 2018: Chinese subsidies and the role of state-owned enterprises.

The agreement calls for China to boost its purchases of US goods, halt the practice of forcing foreign companies to transfer technology, and to not manipulate its currency in order to makes its exports cheaper.

"What we don't know until we read the text is which one is it", said Hillman, who was the former general counsel at the US International Trade Commission and has served on the World Trade Organization's highest court.

"In phase two there will be additional roll backs", Mnuchin said on CNBC early Wednesday.

"There's a lot of work to do ahead", said Jeremie Waterman, president of the China Center at the US Chamber of Commerce.

"China welcomes global investors, including U.S. investors, to invest in China". "This is an enforceable agreement just as the president dictated it would be".

He said the deal amounts to a "modest win-win for both sides" with China gaining a reprieve from the trade war that has harmed its economic growth and the Trump administration getting to set aside a major issue until after his re-election campaign.

The United States has already removed its designation of China as a currency manipulator, and under the trade deal it is halting plans to add new tariffs on billions of dollars worth of Chinese goods, while cutting in half tariffs on about $110 billion of Chinese products.

Still, elements of the deal the administration has touted as achievements effectively take the relationship between the two powers back to where it was before Trump took office.

"China will abide by the commitments made in phase one deal with U.S.".

The agreement includes additional protections for intellectual property and addresses financial services and foreign exchange while including a provision for dispute resolution, which Mnuchin said will be binding for the first time.

"While phase one makes incremental progress, it remains to be seen whether it will deliver any meaningful relief for farmers like me", Farmers for Free Trade spokeswoman and wheat farmer Michelle Erickson-Jones said in a statement.

'It has nothing to do with the election or anything else'.

Washington said Beijing agreed to import, over two years, $200 billion of US products above the levels in 2017, before Trump launched his offensive.

Trump has repeatedly touted the trade pact as a boon for American farmers, saying China will buy $40 to $50 billion in agricultural goods. If disclosed, it would likely prompt a legal challenge by countries like Brazil and Argentina that have been exporting tons of soybeans to meet China's demand.

"It also means Chinese retaliation could be reinstated, dampening farmers" willingness to invest to meet the very hard export targets in the deal'.

The deal also restores a twice-yearly dialogue process that previous administrations conducted regularly but that Trump scrapped.



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