The United States and China announced today they have reached an agreement on the details of a Phase One trade deal. Text of the agreement has yet to be published but here’s where things stand:
- The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports (List 1, 2, 3). The tariff rate for the September 1 tranche on $120 billion (List 4A) will be cut in half, from 15% to 7.5%. There will be no new tariffs on goods that were scheduled for Sunday, December 15 (List 4B).
- According to USTR, the Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. President Donald Trump said he expects China’s agriculture buying to hit $50 billion annually “pretty soon,” without specifying a timetable.
- Nothing has been signed by the U.S. and China officials, as the deal will now go through legal channels before it is brought to the table to be signed.
- USTR Ambassador Lighthizer addressed reporters at the White House, saying:
- U.S. has 2-year commitment on agricultural purchases from China
- Trade deal effective 30 days after signing
- U.S. sees China trade deal signed in Washington
- Lighthizer says U.S.-China deal likely signed at his level
- Liao Min, of the office of the Central Commission for Financial and Economic Affairs, said China would also consider not implementing previously planned tariffs on U.S. products, to go in effect on December 15.
President Trump addressed the Phase One trade deal with the following announcement via Twitter:
Additionally, USTR submitted the following press release regarding the agreement:
United States and China Reach Phase One Trade Agreement
Washington, DC – The United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement. The United States has agreed to modify its Section 301 tariff actions in a significant way.
“President Trump has focused on concluding a Phase One agreement that achieves meaningful, fully-enforceable structural changes and begins rebalancing the U.S.-China trade relationship. This unprecedented agreement accomplishes those very significant goals and would not have been possible without the President’s strong leadership,” said United States Trade Representative Robert Lighthizer.
“Today’s announcement of a Phase One agreement with China is another significant step forward in advancing President Trump’s economic agenda. Thanks to the President’s leadership, this landmark agreement marks critical progress toward a more balanced trade relationship and a more level playing field for American workers and companies,” said Secretary of the Treasury Steven Mnuchin.
The United States first imposed tariffs on imports from China based on the findings of the Section 301 investigation on China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports.