President Donald Trump signed on Wednesday phase one of the administration’s trade deal with China which deescalates an ongoing economic trade war between the world’s two most powerful economies.
“The pact is intended to open Chinese markets to more American companies, increase farm and energy exports and provide greater protection for American technology and trade secrets. China has committed to purchasing an additional $200 billion worth of American goods and services by 2021 and is expected to ease some of the tariffs it has placed on American products,” The New York Times reported. “The agreement is a significant turning point in American trade policy and the types of free-trade agreements that the United States has typically supported. Rather than lowering tariffs and other economic barriers to allow for the flow of goods and services to meet market demand, this deal leaves a record level of tariffs in place and forces China to buy $200 billion worth of specific products within two years.”
At a signing ceremony at the White House, Trump said, “We greatly appreciate you joining us at this White House event, this is a very important and remarkable occasion.”
“Today, we take a momentous step, one that is never been taken before with China toward a future of fair and reciprocal trade as we sign phase one of the historic trade deal between the United States and China,” Trump continued. “Together we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers, and families.”
JUST IN: President Trump officially signs the “phase one” China trade deal, calling it a “momentous step toward a future of fair and reciprocal trade with China.” https://t.co/cS64Kpo0XB pic.twitter.com/4phpahKwTx
— CNBC (@CNBC) January 15, 2020
The White House released the following details detailing the highlights of the trade deal:
SIGNING A LANDMARK PHASE ONE TRADE AGREEMENT: Today, President Trump is signing a new, fully-enforceable Phase One Trade Agreement with China.
- President Trump is making good on his promise to fix the failed policies of the past and deliver fairer trade for the United States.
- This historic agreement will begin to rebalance our vital trade partnership with China and benefit both of our countries.
- The signing of this agreement will be an incredible boost for American businesses, farmers, manufacturers, and innovators.
ENACTING CRITICAL REFORMS: China has agreed to make significant structural reforms in a wide range of critical areas.
- This agreement will help level the playing field for America’s innovators to compete and win.
- Importantly, the reforms included in the agreement are fully enforceable and include a strong dispute resolution system to ensure effective implementation and enforcement.
- For the first time in any trade agreement, China agreed to end its practice of forcing foreign companies to transfer their technology to Chinese companies in order to gain market access.
- China will address numerous longstanding intellectual property concerns in the areas of trade secrets, trademarks, enforcement against pirated and counterfeit goods, and more.
- China agreed to strong commitments on currency practices regarding currency devaluations and exchange rates.
- The agreement addresses a wide range of trade and investment barriers that have prevented American financial services companies from being able to compete in China.
- The agreement addresses structural barriers that have unfairly limited United States food and agricultural exports.
- The agreement includes significant commitments by China on accepting United States agricultural biotechnology products.
REBALANCING TRADE: This agreement will begin rebalancing our trade relationship with China and provide new opportunity for American businesses and farmers.
As a part of the new agreement, China has pledged to increase imports of American goods and services by at least $200 billion.China’s increase in United States imports will take place over the next 2 years, and the trajectory is expected to continue even after 2021.
This increase will make important progress in rebalancing the United States-China trade relationship.
China will be making purchases of United States manufactured goods, agriculture, energy, and services under this deal.
China has agreed to purchase between $40 and $50 billion in American agricultural goods each year for two years – providing a massive boost to America’s hardworking farmers.