United States President Donald Trump and Beijing officials said on Friday that the US and China have reached a so-called phase one trade deal that will see Washington suspend new tariffs on Chinese imports scheduled for Sunday and lower some existing tariffs, while Beijing will step up purchases of some US-made goods and products.
“We have agreed to a very large Phase One Deal with China,” Trump announced on Twitter. “They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more.”
Calling the phase one pact “an amazing deal for all”, Trump said phase two negotiations will begin “immediately” rather than wait until after the 2020 election.
The United States Trade Representative’s (USTR) office said in a statement that Washington will maintain 25 percent tariffs on about $250bn worth of Chinese imports and reduce tariffs imposed on $120bn worth Chinese goods to 7.5 percent.
The USTR added that the deal requires structural reforms to China’s economic and trade regime and covers contentious areas including intellectual property and Beijing’s practice of forcing US firms to transfer technological know-how to Chinese partners. Agriculture, financial services, currency and foreign exchange are also covered.
Trump told reporters on Friday that China will likely hit $50bn in purchases of US agricultural products and that the US will leverage the remaining tariffs on Chinese imported goods as it seeks to negotiate a phase two trade deal with Beijing. He added that China wanted to start talks on the deal’s second phase right away, a timeline he said he supported.
In a press conference Friday night in Beijing, Chinese officials said the two countries have achieved major progress in their phase one trade negotiations, and agreed on the text of a phase one deal.
China will import more US wheat and corn after the deal, China’s vice agricultural minister said.
The US has been pushing for Beijing to commit to buying $50bn in agricultural products in 2020, a figure at which Chinese officials have previously balked.
Asked specifically about the $50bn figure, officials in Beijing said details on value will be disclosed later.
The deal will provide more protection for foreign companies in China, and Chinese companies in the US, Chinese officials said.