Trade war: China to make huge purchases of US goods as details of phase one deal revealed

Trade war: China to make huge purchases of US goods as details of phase one deal revealed

Finbarr Bermingham,Ben White,Doug Palmer

Published: 8:37am, 14 Jan, 2020

This story is part of an ongoing series on US-China relations, jointly produced by the South China Morning Post and POLITICO, with reporting from Asia and the United States.

The trade deal to be signed this week will include pledges by China to buy US$200 billion of US goods over two years in four industries, a Trump administration official and two other sources briefed on the matter said.

The target for manufactured goods purchases will be the largest, worth around US$75 billion.

China will also promise to buy US$50 billion worth of energy, US$40 billion in agriculture and US$35 billion to US$40 billion in services, the three people said.

On Monday night, meanwhile, the United States removed China from a list of currency manipulators, a sign that the relationship between the world’s two largest economies was thawing slightly in the lead up to the signing of the phase one deal.

“In this context, Treasury has determined that China should no longer be designated as a currency manipulator at this time,” the US Treasury Department said.

Upon the announcement of the phase one deal in December, China also secured some tariff relief, with Washington cancelling tariffs that were due to come into force on December 15, and halving a 15 per cent tariff on US$120 billion worth of Chinese goods. However, 25 per cent tariffs on US$250 billion worth of Chinese goods remain in place.

Leave a Reply

Your email address will not be published.