ÍáÍáÂþ»­

Sponsored By
An organization or individual has paid for the creation of this work but did not approve or review it.

ADVERTISEMENT

ADVERTISEMENT

China, U.S. confirm trade deal, but lack of details leave markets confused

Despite Trump tweets, a statement from the United States trade representative and a late-night press conference by the Chinese, details remain sparse about the deal struck by the two countries.

US China trade
Soybeans are harvested outside of Salina, Kansas, Nov. 2, 2018. The United States and China have agreed to an initial trade deal that will result in a reduction of tariffs and purchases of American farm goods, marking a significant de-escalation in the 19-month battle that has rattled the world economy. (Christopher Smith/Copyright 2019 The New York Times)

The White House pushed back Friday, Dec. 13, on criticism of its new trade deal with China, saying it included an unprecedented increase in orders for American products, better protection for U.S. trade secrets and a powerful enforcement mechanism.

Robert Lighthizer, the president's chief trade negotiator, told reporters the deal was the first achievement in a long campaign to remedy an "unfair" commercial relationship between the United States and China.

ADVERTISEMENT

"This is a very, very important step forward," he said during a briefing in the Eisenhower Executive Office Building. "Some people say, 'well, you didn't do some of the most difficult things,' and of course that's true. But you can look at it the other way just as easily and say the most difficult part is getting the first deal. That is the hardest part."

In the next two years, Beijing is committed to buying an extra $200 billion in U.S. agricultural, energy and manufactured goods, Lighthizer said, including $32 billion from American farmers. The agreement contains specific figures for individual products such as poultry and animal feed, which are not being made public to avoid disrupting commodity markets, he added.

The agreement, which Lighthizer said would be made public in the next few weeks, includes "very specific" commitments for China to better police counterfeiting, patent and trademark violations.

RELATED:

Lighthizer said he anticipates the signing ceremony will take place in Washington during the first week of January.

Details of the 86-page accord remained in flux until about 10 a.m. Eastern time Friday, when the president gave his final okay, Lighthizer said.

The trade chief spoke after hours of confusion over the terms of the deal.

ADVERTISEMENT

At a late-night news conference in Beijing, Chinese officials confirmed the deal. With neither government releasing a text, Wall Street opened to confused trading.

"President Trump has sold out for a temporary and unreliable promise from China to purchase some soybeans," Senate Minority Leader Charles Schumer, D-N.Y., tweeted Friday.

Trump approved the so-called "phase one" accord on Thursday, but was no official word about it from the White House until a presidential tweet Friday morning that was long on salesmanship and short on details.

"We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder . . .," the president wrote. ".....The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!"

ADVERTISEMENT

The Office of the U.S. Trade Representative followed up with an official statement, but it did little to dispel the confusion, as it had no specific figures on the agreed upon Chinese purchases or what structural changes China would make in its economic system.

Trump canceled a scheduled tariff increase that would have hit about $160 billion in Chinese goods on Sunday and agreed to halve the 15% tariff on about $120 billion in Chinese products that took effect in September, according to USTR. A 25% tariff on an additional $250 billion in imports will remain in place as negotiations begin on a second deal.

Financial markets were unimpressed. The Dow Jones industrial average rose about 130 points before quickly surrendering those gains, and by mid-afternoon, U.S. markets were nearly flat.

"This trade negotiation is turning into a 3-ring circus that looks a lot like a game show or reality TV series only the victims are American investors. It won't be a Record Stock Market & Jobs! for long if the Trump administration doesn't come clean and show markets their cards. So far we've got nothing. Absolutely nothing," Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in a client note early Friday morning.

The text includes nine chapters, including ones on intellectual property rights, technology transfer, food and farm products, financial services, exchange rates, and dispute resolution, Wang Shouwen said at the 11 p.m. news conference at the State Council Information Office in Beijing.

The Chinese and the American delegations will now carry out a legal review and check the translation, Wang told reporters. They will then make the arrangements for the formal signing of the agreement, he said.

ADVERTISEMENT

Liao Min, vice finance minister, said that China will consider not imposing the tariffs it had threatened to slap on 3,300 American products Sunday, including auto parts and chemicals.

"China will take corresponding measures by not implementing the new tariffs planned for Dec 15," Liao said. "This is the consensus reached by both sides in the phase one deal."

The Chinese side did not make any mention of the dollar amount for the farm products that Beijing will buy from the United States in return.

Bai Ming, an expert linked to China's commerce ministry, said the U.S. tariff rollback was "a goodwill gesture."

"It is an improvement but not enough. China will mean what it says, and the U.S. should not go back on its promise," the nationalist Global Times quoted Bai as saying.

The deal appeared to be "win-win," said Su Qingyi, Deputy Director of Department of International Trade at the Chinese Academy of Social Sciences.

Reaching an agreement and lowering tariffs would boost China's exports and therefor its employment rate and economic growth, Su said before the Friday night news conference.

ADVERTISEMENT

"Secondly, resuming purchases of U.S. farm products is in our own interests," he said. "We need some of their agricultural products. And if the deal includes opening financial service sector, that's good for us."

This article was written by David J. Lynch and Anna Fifield, reporters for The Washington Post. T he Washington Post's Wang Yuan in Beijing contributed reporting.

What To Read Next
Get Local

ADVERTISEMENT