US-China declare trade war truce
The US and China have declared an official truce in their two-year-long trade war, signing a deal that will see the US reduce some tariffs and China purchase hundreds of billions of dollars worth of American goods and services.
US President Donald Trump and Chinese Vice Premier Liu He signed the ‘‘phase one’’ agreement at a ceremony at the White House yesterday.
‘‘Today we take a momentous step – one that has never been taken before with China – toward a future of fair and reciprocal trade as we sign phase one of the historic trade deal,’’ Trump said.
While Trump described the deal as a ‘‘landmark’’ accord, critics said its benefits were relatively minor and left many of the most difficult structural issues unresolved.
As part of the deal, the Trump administration will cancel new tariffs on approximately US$156 billion (NZ$235 billion) in Chinese imports that were set to take effect on December 15.
It will also halve the existing 15 per cent tariff rate on an estimated US$120 billion of Chinese goods that were imposed in September.
Tariffs will remain on US$360 billion of annual Chinese imports to the US, giving Trump leverage to extract more concessions from China in the future.
Trump said he would remove all the remaining tariffs as part of a ‘‘phase two’’ trade deal, which is not expected to be reached before the November presidential election.
‘‘I will agree to take those tariffs off if we do phase two,’’ he said.
He said he expected to visit China soon to meet with President Xi Jinping, whom he described as a ‘‘very, very good friend of mine’’.
China agreed to increase its orders of US soybeans, pork and other agricultural products, manufactured goods and energy products by an estimated US$200 billion over two years.
Both sides agreed that neither party ‘‘shall require or pressure persons’’ to transfer technology to do business or to get regulatory approvals in the US or China, a provision aimed at tackling socalled forced technology-transfer by China.
China also agreed to toughen protection of trade secrets and to assess criminal penalties for ‘‘wilful trade secret misappropriation’’.
Issues such as Chinese subsidies to domestic companies and the behaviour of Chinese state-owned firms will be left for future negotiations.
Democratic Senate leader Chuck Schumer said: ‘‘President Trump’s ‘phase-one’ trade deal with China is an extreme disappointment. He’s conceding our leverage for vague, unenforceable ‘promises’ China never intends to fulfil.’’
Democratic presidential contender Joe Biden said that China was the big winner from the deal. ‘‘True to form, Trump is getting precious little in return for the significant pain and uncertainty he has imposed on our economy, farmers, and workers,’’ the former vice-president said. – Nine