US and China Sign Phase One Trade Agreement
Today, the United States and China have signed the Phase One Trade Agreement. Included in the Phase One Trade Agreement are changes to China’s handling of “intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange” along with “a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. “
Specifically, the Phase One Trade Agreement includes “commitments from China to import various U.S. goods and services over the next two years in a total amount that exceeds China’s annual level of imports for those goods and services in 2017 by no less than $200 billion.”
Additionally, “China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access”.
On the agricultural side, exports from the U.S., “including for meat, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food, and products of agriculture biotechnology” will no longer be subject to tariffs.
Financially, both countries agree to “avoid manipulating exchange rates”, and “shall refrain from competitive devaluations and not target exchange rates” “to gain an unfair competitive advantage.”
Still, U.S. Trade Representative Robert Lighthizer noted 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.”