Trump says US and China will sign trade deal in January

[能田]

(World Today Wednesday 1 January 2020)

Trump says US and China will sign trade deal in January

US President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping

in Beijing, China, November 9, 2017. Reuters file photo

Updated 01 January, 2020

WASHINGTON — US President Donald Trump said Tuesday (Dec 31) that the United States and China would sign a “very large and comprehensive” trade deal at the White House on Jan 15, though exact details of the agreement have not yet been released.

The signing would cement the first phase of an agreement that took nearly two years to negotiate and will formalise a trade truce between the world’s two largest economies. The US president, who announced the date of the ceremony on Twitter, said that “high level representatives of China” would attend the signing ceremony and that he planned to travel to China “at a later date” to begin talks on the second phase of the agreement.

Mr Trump did not say whether Mr Xi Jinping, the Chinese leader, would be in attendance or name any representatives from China who might attend the ceremony.

Text of the agreement, reached in mid-December, has not been made public and its exact contents have yet to be fully vetted by experts or the many businesses that have suffered from the protracted trade fight with China. The deal would reduce only a small portion of the tariffs Mr Trump imposed on US$360 billion (S$487 billion) worth of Chinese goods, leaving many levies in place.

Officials from both countries have said that the agreement includes commitments from China to increase purchases of American farm and energy products, places limits on Beijing’s ability to weaken its currency and provides enhanced protections to American companies doing business in China. The agreement also reduces tariffs on about US$120 billion worth of goods, and forestalled new tariffs that were scheduled for Dec 15.

In announcing the agreement, the United States said that China’s farm purchases were expected to grow to at least US$40 billion annually over a period of two years and that total exports of food, energy, manufactured goods and services to China would increase by a total of US$200 billion. Chinese officials, however, have remained vague when describing what exactly they agreed to buy and on what timeline.

Specific details on China’s purchase commitments could be left out of the text of the agreement that is made public because officials have been concerned that commodities markets could be distorted if such information is released. The deal is expected to have some flexibility so that China can tailor its purchases to market demand.

The agreement was expected to be signed during the first week of January and the fact the timing of the ceremony had not been announced raise some fears that additional obstacles had emerged. However, Mr Peter Navarro, the White House trade adviser, said on Fox Business Network on Monday that the two sides were in the process of translating the agreement and that a signing was imminent.

The trade dispute between the United States and China rattled the world economy during the last 19 months as both countries raised tariffs and other trade barriers while negotiations sputtered and stalled. By breaking the agreement into pieces, China was able to avoid additional tariffs and Mr Trump secured a policy win heading into his reelection campaign.

Yet the first phase of the agreement does not address many of the most significant concerns that the US has with China’s economic practices, particularly its industrial policy and subsidies of state-owned enterprises. Mr Trump has said those issues will be addressed in future talks and has said the remaining tariffs will continue to exert pressure on China to accede to US demands.

Mr Trump announced the signing just before markets opened Tuesday. Stocks in the US were mixed in early trading. THE NEW YORK TIMES