US exports to China to nearly double in next two years

US top trade negotiator praises ‘phase one’ deal, China remains cautious

WASHINGTON/BEIJING: US President Donald Trump’s top trade negotiator praised a “phase one” US-China trade deal which is expected to nearly double US exports to China over the next two years, while China stayed cautious ahead of the signing of the agreement.

US Trade Representative Robert Lighthizer, speaking on CBS’ “Face the Nation” programme on Sunday, said there would be some routine “scrubs” to the text, but “this is totally done, absolutely.”

The deal, announced on Friday after more than two and a half years of on-and-off negotiations between Washington and Beijing, will reduce some US tariffs on Chinese goods in exchange for increased Chinese purchases of US agricultural, manufactured and energy products by some US$200 billion (RM828 billion) over the next two years.

China has also pledged in the agreement to better protect US intellectual property, to curb the coerced transfer of American technology to Chinese firms, to open its financial services market to US firms and to avoid manipulation of its currency.

Asian shares rose yesterday, with the MSCI’s broadest index of Asia-Pacific shares outside Japan hitting a near eight-month high although investor caution over a lack of details capped gains.

A date for senior US and Chinese officials to formally sign the agreement is being determined, Lighthizer said. Chinese purchases of agricultural goods were expected to increase to US$40 billion to US$50 billion annually over the next two years, Lighthizer said.

While China’s trade delegation has expressed optimism about the deal, some government officials are cautious.

“(The deal) is a phased achievement, and does not mean that the trade dispute is settled once and for all,“said a source in Beijing with knowledge of the situation. That source said signing and implementing the pact remained the main priority for success.

Several Chinese officials told Reuters the wording of the agreement remained a delicate issue and care was needed to ensure expressions used in text did not re-escalate tensions and deepen differences.

China faces huge pressure to fulfil the phase one deal, said Shi Yinhong, a professor at Renmin University and an adviser to the Cabinet.

“Trump will also force China to buy a lot of US energy and manufacturing products at this stage or the next stage,“Shi told a forum in Beijing yesterday.

“Look at Trump and Lighthizer, they are very happy. But our government only reported facts, we did not cheer.” – Reuters