Farmers could be biggest beneficiaries in new U.S.-China partial trade deal
Trump signs phase one of agreement, which eases tension between economic superpowers
WASHINGTON — President Donald Trump signed a partial trade deal with China on Wednesday that includes commitments from China to purchase $200 billion in American goods and heads off an escalation in tensions between the world’s two largest economies.
Mr. Trump, before signing the agreement alongside Chinese Vice Premier Liu He, called it “a sea change in international trade” and “the biggest deal anyone has ever seen.” The deal aims to hold China accountable on intellectual property protections for U.S. companies and sets a standard for what both sides would consider currency manipulation.
A key component of the deal, Mr. Trump said, calls for China to purchase $50 billion worth of U.S. farming products annually. American farmers have been hit hard in recent months by plummeting commodity prices, partially caused by Chinese tariffs imposed in retaliation for the Trump administration’s trade aggressions.
“The farmers are going to be so happy,” Mr. Trump told a packed
White House East Room before signing the agreement. “Go out and buy a larger tractor.”
The text of the 96-page deal broke down China’s commitments to purchase $200 billion more of American goods and services over the next two years, compared with Chinese purchases in 2017. It reflected new and expanded markets from financial services and pharmaceuticals to liquefied natural gas and dairy products.
China agreed to spend $78 billion more on American manufactured goods, $52 billion more on energy products and $38 billion on services. It was not immediately clear how China intends to meet such large goals.
The text spells out only the next two years of purchases. Both sides expect China’s purchases to continue “on this same trajectory for several years after 2021,” the deal stated.
In exchange, the U.S. agreed to cut tariffs on $120 billion of Chinese imports to 7.5%, Mr. Trump said.
U.S. tariffs of 25% will remain enforced on another $250 billion worth of Chinese goods coming into the country — and Mr. Trump said those will stay in place until the second phase of the trade deal is completed.
Negotiations toward a phase two deal will begin once phase one is rolled out, Mr. Trump said.
At the signing ceremony — which was filled to capacity with reporters, including many from Chinese media — both leaders spoke of mutual cooperation and hope that the U.S. and China can work together toward future goals.
“China has given us a lot of help, and we’ve given them a lot of help,” Mr. Trump said, noting that China is helping the administration on denuclearization efforts in North Korea and cracking down on shipments of fentanyl, the powerful drug that has flooded into the U.S. from China in recent years.
Mr. Liu, the Chinese vice premier, called the deal “mutually beneficial and a winwin agreement.” Through an English interpreter, Mr. Liu framed the deal as positive as China shifts from “high-speed growth to highquality development.”
“At times, there were setbacks in our trade talks because, on some issues, we don’t see eye to eye,” Mr. Liu said. But “our economic teams did not give up.”
Mr. Liu also read aloud a letter from President Xi Jinping, who sent his “warm greetings.” Mr. Xi wrote the deal “is good for China, for the United States, and for the whole world.”
Rep. Glenn Thompson, RCentre County, said he worked with U.S. Trade Representative Robert Lighthizer on hammering out the agriculture purchases.
Mr. Thompson, a top member of the House Agriculture Committee, helped win the last-minute inclusion of hardwood lumber in the deal — as a footnote in the definition of “manufactured goods.” Hardwood lumber, a major Pennsylvania export, has been hit hard by U.S.-China trade tensions, he said.
“It’s an historic step forward in our nation’s trade relations,” Mr. Thompson said.
Mark O’Neill, spokesman for the Pennsylvania Farm Bureau, said the deal “should boost hopes among farm families that there will be a new demand for their products.”
“Farmers across the U.S. have suffered financially over the past 18 months due to the prolonged trade war with China,” Mr. O’Neill said. “Over the next few months, farmers will be counting on China to follow through on its commitment.”
The deal is a major development for Mr. Trump, who is facing an impeachment trial in the Senate as soon as next week. The deal was signed shortly after the House of Representatives named its managers for the trial — news Mr. Trump referenced a few times in sometimes rambling remarks.
Mr. Trump appeared relaxed and in good spirits, spending the first half-hour introducing dozens of people in the room and cracking jokes. Those in attendance included much of his Cabinet, White House trade staff, Republican senators and representatives and other supporters, like Lou Dobbs.
On Wednesday, Mr. Trump referenced a campaign rally in Pennsylvania as the start of his ambitions to level the playing field with China.
“In June of 2016, in the great state of Pennsylvania, I
promised that I would use every lawful presidential power to protect Americans from unfair trade,” Mr. Trump said. “Unlike those who came before me, I’ve kept my promise.”