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Agreement On “Phase One” Trade Deal Announced By US And China

Agreement On “Phase One” Trade Deal Announced By US And China
Bringing huge relief to the global markets and companies, both the United States and China announced that they have agreed to a “phase one” trade deal that would also include the US scaling down the already imposed tariffs on Chinese goods. The announcement were made by the US President Donald Trump and Chinese officials on Friday.
“We have agreed to a very large Phase One Deal with China,” Trump said on Twitter Friday morning. He further said that officials in China have “agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more.”
On its part of the deal, the US has conceded to suspending of the tariffs on $160 billion of Chinese goods that was due to go into effect from December 15, Trump said. He also said that his administration would be cutting down the existing tariffs to 7.5 per cent.
The United States Trade Representative said in a statement Friday morning that the phase one deal on trade between the two largest economies of the world encompasses critical issues of intellectual property, technology transfer, agriculture, financial services, currency, and foreign exchange.
The USTR statement however said that a 25 per cent tariffs on $250 billion of Chinese imports would still be maintained by the United States but would reduce the rate of tariffs to 7.5 per cent on $120 billion of Chinese imports into America.
On its part, a similar announcement was made in Beijing by Chinese officials. The two countries have achieved major progress in their phase one trade negotiations, said Chinese officials in a press conference on Friday night in Beijing, and added that both the countries have come to an agreement on the text of a phase one deal.
China’s vice agricultural minister said that more US wheat and corn would be imported by China after the deal.
The demand for the US though has been that China should commit to making annual purchases of American farm products worth $50 billion in 2020 which has previously been denied by Chinese officials.
China will disclose the details on the value of the American farm purchase later, said officials in Beijing when they were specifically asked about the $50 billion figure.
The Chinese officials said that more protection for foreign companies in China will be provided by the deal while the US will reciprocate for Chinese companies in the US.

Christopher J. Mitchell

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