China-US phase one deal welcomed as a first step towards an agreement

By Damian Brett

China and the US last night signed the first phase of a trade deal that has been welcomed by US companies and business groups, but they urged the two countries to begin the second round of negotiations and remove all tariffs.

China has pledged to increase US imports over 2017 levels by $200bn over the next two years, while it will also take action to combat counterfeiting and crack down on other trade practices opposed by the US.

The deal also halts the addition of any new tariffs but leaves in place most of the levies placed by the US on $360bn worth of Chinese products. China will leave in place tariffs on the $100bn worth of US goods.

The commitment by China to buy an extra $200bn worth of US goods includes $52.4bn of energy exports, $32bn of agricultural products, $77bn of manufactured goods and $37.9bn of services.

The deal also won’t affect the US’ December pledge to halve a 15% tariff on about $120bn worth of Chinese goods.

Express firm UPS said it applauded the negotiators from the US and China on reaching a phase one trade agreement that “lays the foundation for successful and inclusive trade”.

“The Phase One trade deal is an important first step in strengthening the rules of trade between the two countries and in particular for providing greater trade predictability to UPS’s small and medium sized customers,” said David Abney, UPS chairman and chief executive.

“We urge both the US and China to continue to work together to find common ground that establishes a policy and regulatory framework that promotes a comprehensive, mutually-beneficial business environment.”

However, the US National Retail Federation (NRF) said the deal should be seen as a first step and that the tariffs that are in place should be removed.

“NRF strongly supports the administration’s efforts to address China’s unfair trading practices but we hope this is the first step toward eliminating all of the tariffs imposed over the past two years,” NRF president and chief executive Matthew Shay said.

“The trade war won’t be over until all of these tariffs are gone. We are glad to see the phase one deal signed, and resolution of phase two can’t come soon enough.”

US Chamber of Commerce chief executive Thomas Donohue said it was critical that both parties begin negotiations on phase two of the deal.

“This agreement signifies a new chapter in US-China relations. When fully implemented, China’s commitments will create a better environment for US exporters and investors and begin the process of re-balancing the economic relationship between the US and China,” said Donohue.

“We hope this deal will usher in a new era of trust between both countries and pave the way for Phase 2 negotiations to begin in a timely manner.”

 

 

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