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13 Dec, 2019 15:32

Trump says ‘very large Phase One Deal’ with China agreed

Trump says ‘very large Phase One Deal’ with China agreed

The United States and China have reached a “very large” trade deal, President Donald Trump has announced. The accord will see China step up its imports of American products, and could end a two-year trade war.

The president claimed that under the agreement, China will make “massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more,” later specifying to reporters that he predicted the country would purchase over $50 billion in US agricultural products.

The farmers are going to have to go out and buy much larger tractors” because China is going to be buying so many American farm goods, Trump quipped.

The agreement will increase China’s US imports by $200 billion over a two-year period in the agriculture, manufacturing, energy, and services sectors, according to US Trade Representative Robert Lighthizer. Agriculture in particular is set to get a boost of $16 billion in the first year alone, up from 2017’s baseline of $24 billion, and China has agreed to aim for Trump’s goal of $50 billion. The deal also includes binding changes to some undesirable trade practices; for example, US companies will no longer be pressured to transfer technology to China. Lower tariffs will take effect 30 days after the deal is signed.

However, the 25 percent levies on around $250 billion worth of Chinese goods will remain in place, and the planned 15 percent duties on $160 billion of Chinese consumer products will be unaffected by the deal. Certain other existing tariffs on $120 billion in Chinese goods will be rolled back from 15 percent to 7.5 percent.

Negotiations on phase two of the deal will begin immediately, Trump added.

As the US leader announced the successful outcome, China’s vice ministers of finance and commerce held a press conference heralding the agreement. According to Vice Commerce Minister Wang Shouwen, Washington and Beijing managed to reach a consensus on intellectual property theft and fake goods, two sticking points for the Trump administration during the trade war. Yet, Shouwen cautioned that Beijing will step up its protection of intellectual property at its own pace.

Also on rt.com Stock markets surge on reports of US-China deal to pause trade war

Beijing will also cancel tariffs on US goods set to come into effect on Sunday. As part of the deal, both the US and China agreed to strengthen protection for each other’s companies operating on each other’s soil, Chinese officials said.

Stock markets rallied on Thursday as news of the deal began to leak out. Asian markets jumped following, while US stocks hit record highs on Friday. The trade conflict between the world’s two largest economies has been raging for the better part of two years, since Trump announced tariffs on Chinese solar panels and washing machines in January 2018. After a series of tit-for-tat tariff applications, the US applied levies on $550 billion worth of Chinese goods, while China targeted about $185 billion worth of US imports.

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