- US, China Sign Initial Trade Deal
The two world’s largest economies on Wednesday signed the first phase of the trade deal after 18 months of discussions and disagreements.
In the 86-page agreement signed by both countries, China agreed to buy an additional $12.5 billion in US agricultural products in the first year of the deal and another $19.5 billion in the second year.
In exchange, the United States agreed to lower tariffs on $120 billion worth of Chinese products from 15 percent to 7.5 percent.
President Trump, who has started using the deal to further his presidential campaign, said despite his impeachment, his administration continues to right the wrong of the past administration.
“Together we are righting the wrongs of the past and delivering a future of economic justice and security,” the president stated.
Zippy Duvall, the President, Farm Bureau, said the agreement is an important step in the right direction.
According to him, “China was once the largest market for U.S. agricultural products but has dropped to fifth largest since retaliatory tariffs were introduced. This agreement will help turn around two years of declining agricultural exports.”
The new agreement will see China buying $200 billion worth of US goods in the next two years to lower the $420 billion trade deficit recorded between the two nations in 2018.
Robert Lighthizer, the president, Top trade negotiator, called the deal “massively good first step,” adding that China’s purchases will help create access for American companies.
“Are we in an ideal spot? No,” Lighthizer told reporters at the White House before the signing. “Is this a massively good first step? Yes.”
Trump, who said the next phase of the deal will begin immediately, explained that the remaining tariffs are leverage to ensure China stays in-line and will come off only when the next phase of the deal is complete.
“We have pretty strong cards,” said Trump. “Nobody really understood the deal until today when we released it, so it’s a much bigger deal than people thought.”