"In order to fully capture the benefits of this deal, we need China to eliminate all tariffs on USA pork for at least five years". The first phase of the trade deal includes Intellection Property (IP) Protection and Enforcement, ending forced technology transfer, dramatic expansion of American agriculture, removing barriers to American financial services, ending currency manipulation, rebalancing the US-China trade relationship and effective dispute resolution.
President Donald Trump signs a trade agreement with Chinese Vice Premier Liu He, in the East Room of the White House, Jan. 15, 2020, in Washington.
Soybeans futures in Chicago fell 1.2 per cent, cotton slipped 1.1 per cent and hog futures we down 0.4 per cent. U.S. West Texas Intermediate crude is 0.4 per cent lower, while natural gas fell 2.8 per cent.
U.S. Vice President Mike Pence calls the signing "a good day for America, China and the world" in his speech. The US wants China to address the huge subsidies it gives to industries including steel and solar panels that have allowed Chinese companies to dominate those markets with cheap exports.
White House economic adviser Larry Kudlow said the administration "got a lot of what we wanted" in the deal. China has cut imports of American agricultural products during the long-running trade war between Washington and Beijing, roiling the economy in the nation's farm belt. That unusual feature suggests Trump's trade negotiators weren't certain whether the event would happen as scheduled. The two leaders are meeting again in Washington on Wednesday to sign the deal.
Chinese President Xi Jinping told Trump in a letter that he welcomes the phase one deal reached with the U.S. and that he is willing to stay in close touch with the USA leader.
But it will leave in place 25 per cent tariffs on a vast, $250 billion array of Chinese industrial goods and components used by United States manufacturers.
Former US Vice President Joe Biden, who is a leading Democratic presidential candidate, alleged that China is the big victor of Trump's "phase-one" trade deal with Beijing.
After several rounds of talks, the United States and China initially reached "a historic and enforceable agreement" in December, averting a new round of tariff hikes.
But he said he will only remove tariffs "if we're able to do phase two".
However, the most hard issues remain to be dealt with in "phase two" negotiations, including massive subsidies for state industry. That's a windfall for Trump supporters in rural America but an ambitious goal considering that China has never bought more than $26 billion in USA agricultural products in a year.
But steep 25% tariffs remain in place on much of what the US buys from China, including components that American factories use to assemble finished products.
"I'll be going over to China in the not-too-distant future to reciprocate", he said. But the fate of the remaining duties has been unclear, with economists saying they are likely to continue to be a drag on both economies.
The deal also restores a twice-yearly dialogue process that previous administrations conducted regularly but that Trump scrapped.
