Us China Agreement

Although the agreement also sets targets for purchases of certain services negotiated by China from the United States, these data are not reported monthly and are not processed here. The agreement also contains targets for 2021, which are not presented here. Assessing progress in achieving the Phase 1 targets for merchandise trade requires information from both U.S. export and import statistics, as Chapter 6 of the agreement, Article 6.2.6, states that “official Chinese trade data and official U.S. trade data are used to determine whether this chapter has been implemented.” One consequence is that there are two sets of monthly data to follow (Chinese imports and U.S. exports). A second is that there are two different annual targets, and therefore monthly, given that the basic level of Chinese imports in 2017 deviates from the initial level of U.S. exports for 2017. Finally, the products covered by the purchase commitments are listed in the appendix of the Schedule 6.1 agreement at levels of 4, 6, 8 or 10 digits; These will then be ranked in U.S.

or Chinese trade statistics for 2017 and 2020. As of our October 26, 2020 report, we have included the U.S. export product 8800 (in addition to 8802 aircraft) in “secure manufacturing” and total, and we have relocated it out of the “uncovered” category. All these obstacles and complications lead to political failure. Regardless of who is president, the United States must get China to liberalize its tariffs, reduce non-tariff barriers, and streamline its subsidies and other practices that distort economic incentives. In response to Trump`s trade war, China imposed additional tariffs on more than 50 percent of U.S. exports in 2018 and 2019. It is mysterious that the legal text of the first phase of the agreement did not remove, reduce or even mention the word “tariffs,” and it did little to address the major trade problems that the United States has with China. Instead, the Trump administration has provided an excellent case study on why simple purchase commitments can`t go around.

The deal signed Wednesday has some victories for Mr. Trump: China has pledged to buy an additional $200 billion in U.S. goods and services by 2021 and to aggressively address trade practices that the Trump administration has criticized. But the text of the agreement does not provide enough information to determine how it will work in practice and it is not certain that China will interpret it differently from the United States. Tariffs imposed by the United States and China on imports from each other have decimated bilateral trade in 2018 and 2019. The Trump administration negotiated the legal text of the Phase 1 agreement to force China to buy an additional $200 billion of U.S. goods and services in addition to 2017 (not 2019) if bilateral trade was more robust.2 The legal evaluation of the agreement therefore requires a comparison of 2020 with 2017. Today, we are taking an important step that china has never taken towards a future of fair and reciprocal trade, as we sign the first phase of the historic U.S.-China trade agreement. Together, we are correcting the injustices of the past and creating a future of economic justice and security for American workers, farmers and families. And it will be a great agreement for both countries. That is well over $200 billion, and it will grow every year.