First Phase of US-China Trade Deal Announced

WHITE HOUSE - A trade deal between the United States and China, separately announced Friday by both countries, will be such a boon for American farmers they will “have to go out and buy much larger tractors,” according to President Donald Trump.

The U.S. president, speaking to reporters in the Oval Office, described the agreement with Beijing as a “phenomenal deal.”

Officials of the two countries announced they have agreed on the text of the first phase of the trade pact and will avert imposing further tariffs on each other.                   

As part of the agreement, Chinese officials said their country will increase imports of American agricultural, energy and pharmaceutical products.

Trump said agricultural purchases alone will total $50 billion “pretty soon.”

 “This will create better conditions for China and the United States to strengthen cooperation,” Chinese Vice Commerce Minister Wang Shouwen said at a news conference in Beijing.    

The announcement comes just two days before $160 billion in new levies on Chinese products by the United States were set to take effect.

“The tariffs will largely remain — 25% on $250 billion, and we'll use them for future negotiations on the Phase Two deal,” Trump told reporters.

Those second round negotiations will commence prior to next November’s U.S. presidential election, according to Trump.

Officials in Beijing said they also expect Trump to roll back some of the tariffs currently collected by the United States on $360 billion worth of Chinese goods.   

The office of the U.S. Trade Representative in a statement said the two countries “reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.” 

Global equity markets and oil prices surged on news of the trade agreement.

"Today's announcement represents real progress, and manufacturers look forward to working with President Trump and U.S. Trade Representative Robert Lighthizer to achieve additional concrete outcomes on other key unfair trade practices that translate into a lasting, game-changing agreement,” said National Association of Manufacturers President and Chief Executive Officer Jay Timmons in a statement.

Trump, with Chinese Vice Premier Liu He in the Oval Office on October 11, announced a “substantial phase one deal” of a trade pact.

The president, at that time, said the first portion of the pact would be written over the next several weeks, and would cover intellectual property and financial services, along with the purchase of up to $50 billion worth of agricultural products by China. 

That turned out to be premature, however, and negotiations dragged on.

Trump “has sold out for a temporary and unreliable promise from China to purchase some soybeans,” Senate Democratic Leader Chuck Schumer said in a statement. “We’ve heard this song and dance from China before. Once again, Donald Trump cannot be relied upon to do the right thing for American workers and businesses, even when his statements were pointing in the right direction.”

A member of the Senate’s foreign relations committee, Democrat Chris Murphy, also has issues with what he has heard about the pact.

“The China trade deal appears to be a total capitulation, as predicted,” Murphy wrote on Twitter. “The trade war cost America 300,000 jobs, and in exchange, in this ‘deal’ China made exactly ZERO hard commitments to structural reform. What a disaster.”

Some analysts are also skeptical about the fresh Phase One announcement.

Trump “gave up something for a vague promise there will not be the scheduled tariff increase on Sunday,” Gordon Chang, author of the “Coming Collapse of China,” told VOA. 

The U.S. president has “agreed to roll back tariffs and he doesn't have a text of an agreement. Even if he had the text, I think that this is sort of, here we go again — trading real things for promises. The Chinese will just dishonor it,” predicted Chang, who spent nearly two decades working in China and Hong Kong.  

According to USTR, “agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement.”

Progress in the trade negotiations with China is a bright spot in the Trump presidency.

While the Chinese were making their announcement in Beijing, the House Judiciary Committee, voted 23-17 along party lines, to pass to the full House two articles of impeachment against Trump.