USA UU. And China will sign agreement to relieve trade tensions

WASHINGTON: The United States and China will sign the first phase of a trade agreement that will include approximately $ 200 billion in Chinese purchases of US goods and services over the next two years, an agreement designed to alleviate the last two years of commercial tensions between the economy . Superpowers

People familiar with the negotiations said the pact is expected to include, among other provisions, a suspension of the tariff increases planned by the United States on China’s exports to the United States, in exchange for Beijing’s commitments to step up orders. of soybeans, pork and other American agricultural products. in $ 32 billion, of products manufactured in about $ 80 billion, of energy products in about $ 50 billion and services in about $ 35 billion. Details on purchases of specific products in each of the categories will not be disclosed, people said, as both parties feel that such disclosure could risk distorting markets.

SHARE YOUR THOUGHTS

What would you like to see in the next phase of the trade agreement between the United States and China? Join the conversation below.

The agreement, which will be signed Wednesday morning at the White House, would mark a pause in a trade war that has shaken world markets and businesses for almost two years. President

Triumph

He has said that he would then travel to Beijing to negotiate a broader pact, which would address other more complex problems, such as Chinese subsidies to national companies, particularly state-owned enterprises, and the tactics that the United States says Beijing uses to acquire technological knowledge. Americans

Chinese officials have not confirmed any details of the second phase of the plan, and instead have said that any future negotiations will depend on how the phase one agreement is implemented. Beijing leadership, under the president

Xi Jinping,

So far it has resisted the efforts of the United States to make it make fundamental changes in its state-led economic model.

In exchange for China’s purchase commitments, the Trump administration will cancel new tariffs on approximately $ 156 billion in Chinese imports that will take effect on December 15. He also agreed to halve the existing 15% tariff rate by approximately $ 120 billion of Chinese Products that had been imposed on September 1. But tariffs will remain at approximately $ 360 billion of annual Chinese imports to the United States, most of the Chinese products sold in the United States.

Even while the two sides were preparing for a signing ceremony, there were indications of discrepancy in the way in which Beijing and Washington interpret what they agreed in terms of tariff relief. A statement issued by the state news agency Xinhua on December 13, confirming the agreement of the first phase, said that “both sides have reached a consensus that the US side will honor its commitments to eliminate its additional tariffs on Chinese products “. while US officials insist that there is no such agreement.

With Beijing and Washington ready to seal a first-stage trade pact, American farmers are optimistic about the future. But some experts wonder if China’s commitment to the agreement will live up to the expectations of the White House. Photo: Scott Olson / Getty Images

The text of the first phase agreement is expected to be published on Wednesday morning. Chinese Deputy Prime Minister Liu He, chief commercial negotiator of Xi, will lead a delegation of 10 members to attend the signing ceremony.

Myron bright,

The executive vice president of the US Chamber of Commerce. The US, who met with Mr. Liu in Beijing on Monday, said the deputy prime minister said “the first phase agreement helps the general atmosphere of the relationship between the US and China.” Upon reaching a trade commitment, the Trump administration is pushing to restrict Chinese purchases of US technology, particularly by telecom giant Huawei Technologies Co.

Also as part of the first phase agreement, China is committed to giving US companies greater access to its financial services sector, including banking, insurance and securities; refrain from devaluing the Chinese yuan to help its exporters; and to slightly improve their protection of intellectual property in the USA. UU. for products such as pharmaceuticals. The agreement will have an “application” section that requires both parties to seek dispute resolution through three rounds of talks, a process that would take about 90 days.

If both parties fail to resolve such disagreements, the US UU. They could take what the U.S. Trade Representative. UU.

Robert Lighthizer

it calls a “proportionate reaction”, which means that the United States could re-impose tariffs without being subject to Chinese countermeasures. That option would also be available to China if it had disputes.

The ambitious purchasing goals included in the agreement are raising questions about how Beijing would achieve those goals. China imported about $ 186 billion a year from the US. UU. In 2017, one year before the commercial war began.

Increasing that figure by approximately $ 200 billion in two years would mean an annual growth rate of more than 30% for two consecutive years, according to

Derek Scissors

a scholar resident in the American Enterprise Institute. That would be far beyond what American exporters have achieved.

“Agriculture is not the main challenge, manufacturing is,” said Mr. Scissors, referring to China’s promise to increase manufacturing purchases in the United States by approximately $ 80 billion. “I see that the Chinese do not meet their goals and blame the lack of willingness of the United States to export high-tech products,” he said.

Write to Lingling Wei at [email protected]

Copyright © 2019 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

.

Leave a Reply

Your email address will not be published. Required fields are marked *