China and US sign phase one trade deal

United States President Donald Trump and Chinese Vice Premier Liu He signed a phase one trade deal on Wednesday in Washington. The agreement de-escalates an 18-month bilateral dispute that stoked fears of a global recession.

Chinese President Xi Jinping told Trump in a letter that he welcomes the phase one deal reached with the US and that he is willing to stay in close touch with the US leader.

As part of the deal, China committed to purchases of at least an additional $200bn in US goods and services over two years, while the US has suspended or is reducing some tariffs on Chinese goods.

Xi told Trump in the letter, read by Liu during the signing ceremony, that the deal shows how the two countries can resolve their differences and find solutions based on dialogue.

Liu, China’s top negotiator in the trade talks with the US, also said separately during the ceremony that China will abide by the commitments it made in the phase one deal and that the agreement is good for both countries and the world.

“In this deal, according to China’s domestic market demand, Chinese companies will buy $40bn in US agriculture products annually over the next two years based on market conditions,” Liu said. He also added that both Chinese and US governments should create a favourable market environment for such purchases.

“Of course, when the market demand is booming, Chinese companies may buy more,” he said.