This article is from the source 'washpo' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.washingtonpost.com/world/national-security/trump-says-hell-sign-first-step-china-trade-deal-on-jan-15/2019/12/31/ff8a6b78-2bde-11ea-bffe-020c88b3f120_story.html

The article has changed 4 times. There is an RSS feed of changes available.

Version 1 Version 2
Trump says he’ll sign first-step China trade deal on Jan. 15 Trump says he’ll sign first-step China trade deal on Jan. 15
(about 1 hour later)
WEST PALM BEACH, Fla. — The first phase of a U.S.-China trade agreement will be inked at the White House in mid-January, President Donald Trump announced Tuesday, adding that he will visit Beijing at a later date to open another round of talks aimed at resolving other sticking points in the relationship.WEST PALM BEACH, Fla. — The first phase of a U.S.-China trade agreement will be inked at the White House in mid-January, President Donald Trump announced Tuesday, adding that he will visit Beijing at a later date to open another round of talks aimed at resolving other sticking points in the relationship.
“I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15,” Trump tweeted from his Florida home. “The ceremony will take place at the White House.” The so-called “Phase One” agreement is smaller than the comprehensive deal Trump had hoped for and leaves many of the thorniest issues between the two countries for future talks. Few economists expect any resolution of “Phase Two” before the presidential election in 2020.
High-level Chinese government officials will attend, he said. And the two sides have yet to release detailed documentation of the pact, making it difficult to evaluate.
“At a later date I will be going to Beijing where talks will begin on Phase Two!” Trump said. He did not announce a date for the visit. Trump said high-level Chinese government officials will attend the signing on Jan. 15 of “our very large and comprehensive Phase One Trade Deal with China.”
In the first-step agreement, which actually is smaller than the comprehensive deal Trump initially had reached for, the U.S. dropped its plan to impose new tariffs on $160 billion of Chinese imports starting earlier this month. Such a move would likely have led to higher prices for many consumer goods as Americans shopped for gifts during the holiday season. “At a later date I will be going to Beijing where talks will begin on Phase Two!” Trump said in his tweet. He did not announce a date for the visit.
The Trump administration also agreed to cut existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%. China has agreed to boost its U.S. goods imports by $200 billion over two years, the U.S. Trade Representative said Dec. 13 when the deal was announced. That includes increased purchases of soybeans and other farm goods that would reach $40 billion a year.
In return, the U.S. said China agreed to buy $40 billion a year in farm products over two years, even though U.S. agricultural exports to China have never exceeded $26 billion a year. China has also agreed to stop forcing U.S. companies to hand over technology and trade secrets as a condition for gaining access to China’s vast market, demands that had frustrated many U.S. businesses.
Beijing also committed to ending a long-standing practice of pressuring companies to hand over their technology as the price for gaining access to the vast Chinese market. In return, the Trump administration dropped plans to impose tariffs on $160 billion of Chinese goods, including many consumer items such as smartphones, toys and clothes. The U.S. also cut tariffs on another $112 billion of Chinese goods from 15% to 7.5%.
China also agreed to lift certain barriers to its markets for such products as beef, poultry, seafood, pet food and animal feed, according to U.S. officials. Many analysts argue that the results are fairly limited given the costs of the administration’s 17-month trade war against China. U.S. farm exports to China fell in 2018 to about one-third of the peak reached six years earlier, though they have since started to recover.
But at the same time, the initial agreement left some major issues unresolved, notably complaints that Beijing unfairly subsidizes its own companies to give them a competitive advantage in world markets. Import taxes remain on about half of what the U.S. buys from China, or about $250 billion of imports. Those tariffs have raised the cost of chemicals, electrical components and other inputs for U.S. companies. American firms have cut back on investment in machinery and other equipment, slowing the economy’s growth this year.
No detailed paperwork on the agreement has been released, and China has yet to confirm the dollar amount of U.S. farm goods it has pledged to buy. A study last week by economists at the Federal Reserve found that all of the Trump administration’s tariffs, including those on steel and aluminum as well as on Chinese imports, have cost manufacturers jobs and raised their costs. That’s mostly because of retaliatory tariffs imposed by China and other trading partners.
Both sides have said they’ve been waiting for text of the agreement to be translated between Chinese and English. Many experts in both the U.S. and China are skeptical that U.S. farm exports can reach $40 billion. The most the U.S. has ever exported to China before has been $26 billion. China has not confirmed the $40 billion figure.
Still, the agreement has helped calm concerns in financial markets and among many U.S. businesses that the trade war with China would escalate and potentially lead to a recession. The approval by the Democratic-led House of the Trump administration’s revamp of the NAFTA agreement has also reduced uncertainty around global trade.
Since the U.S.-China pact was first announced in October, the stock market has risen steadily and is on track to finish the year with its biggest gain since 2013. Most analysts now forecast that the economy will grow at a steady if modest pace in 2020, extending the current record-long expansion.
The Phase 1 deal has left some major issues unresolved, notably complaints that Beijing unfairly subsidizes its own companies to give them a competitive advantage in world markets.
The Trump administration argues -- and independent analysts agree -- that China uses the subsidies in an effort to gain an advantage in cutting-edge fields such as driver-less cars, robotics and artificial intelligence.
Another sticking point in future talks will likely involve rules around data flows, with China looking to require more foreign companies to keep data they use in China as opposed to stored overseas.
“It’s a very toxic brew and I don’t know that we’re really going to see much progress on it,” said Mary Lovely, a trade economist at the Peterson Institute for International Economics.
Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.