Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

What's in the U.S.-China 'phase one' trade deal

share with twitter share with LinkedIn share with facebook
share via e-mail
12/14/2019 | 01:45am EST

The United States and China have agreed on the terms of a "phase one" trade deal that reduces some U.S. tariffs on Chinese goods while boosting Chinese purchases of American farm, energy and manufactured goods and addressing some U.S. complaints about intellectual property practices.

Following are details of the deal released by both sides. The broad outlines were similar to a deal in principle announced https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vice-premier-liu-peoples-republic-china-meeting by Trump in October that was dominated by increased Chinese purchases of U.S. agricultural goods.


The United States will not proceed with 15% tariffs scheduled to go into effect on Sunday on nearly $160 billion worth of Chinese goods, including cell phones, laptop computers, toys and clothing.

China cancelled its retaliatory tariffs due to take effect that same day, including a 25% tariff on U.S.-made autos.

The United States will cut by half the tariff rate it imposed on Sept 1. on a $120 billion list of Chinese goods, to 7.5%

U.S. tariffs of 25% on $250 billion worth of Chinese goods will remain unchanged, providing U.S. negotiating leverage for a second phase of negotiations next year.


U.S. officials say China agreed to increase purchases of American products and services by at least $200 billion over the next two years, with an expectation that the higher purchases will continue after that period.

The purchases include manufactured goods, agricultural goods, energy and services, and are expected to reduce the $419 billion U.S. trade deficit with China, officials said. China bought $130 billion in U.S. goods in 2017, before the trade war began, and $56 billion in services, U.S. data show.

AGRICULTUREChina has committed to increase purchases of U.S. agriculture products by $32 billion over two years. That would average an annual total of about $40 billion, compared to a baseline of $24 billion in 2017 before the trade war started.

Trump has demanded that China buy $50 billion worth of American farm goods annually. U.S. Trade Representative Robert Lighthizer said China agreed to make its best efforts to increase its purchases by another $5 billion annually to get close $50 billion.

China has committed to reduce non-tariff barriers to agricultural products such as poultry, seafood and feed additives as well as approval of biotechnology products.


The deal includes stronger Chinese legal protections for patents, trademarks, copyrights, including improved criminal and civil procedures to combat online infringement, pirated and counterfeit goods.

The deal contains commitments by China to follow through on previous pledges to eliminate any pressure for foreign companies to transfer technology to Chinese firms as a condition of market access, licensing or administrative approvals and to eliminate any government advantages for such transfers.

China also agreed to refrain from directly supporting outbound investment aimed at acquiring foreign technology to meet its industrial plans -- transactions already restricted by stronger U.S. security reviews.


The currency agreement contains pledges by China to refrain from competitive currency devaluations and to not target its exchange rate for a trade advantage -- language that China has accepted for years as part of its commitments to the Group of 20 major economies.

The deal subjects any violations of currency commitments to the agreement's enforcement mechanism, under which they could incur U.S. tariffs.

A senior Trump administration official said the currency agreement is based on provisions in the U.S.-Mexico-Canada Agreement trade deal, which require the three countries to disclose monthly data on international reserve balances and intervention in foreign exchange markets, along with quarterly balance-of-payments data and other public reporting to the International Monetary Fund.


Under dispute resolution is an arrangement allowing parties to resolve differences over how the deal is implemented through bilateral consultations, starting at the working level and escalating to top-level officials. If these consultations do not resolve disputes, there is a process for imposing tariffs or other penalties.

Lighthizer told reporters the United States expected neither side would retaliate if appropriate action was taken as part of the process and following "consultation in good faith."


U.S. officials said the deal includes improved access to China's financial services market for U.S. companies, including in banking, insurance, securities and credit rating services. It aims to address a number of longstanding U.S. complaints about investment barriers in the sector including foreign equity limitations and discriminatory regulatory requirements.

China, which has pledged https://www.reuters.com/article/us-china-economy-foreigninvestment-refor-idUSKBN14J087 for years to open up its financial services sector to more foreign competition, said the deal would boost imports of financial services from the United States.

But China's state-run Global Times newspaper said that not all foreign institution will be able to tap China's financial market. "Naturally, entities from countries which are friendly to China will be favoured by the Chinese people," the paper said in a commentary https://www.globaltimes.cn/content/1173359.shtml.

(Reporting by David Lawder, Andrea Shalal and Jeff Mason; Editing by Leslie Adler)

Stocks mentioned in the article
ChangeLast1st jan.
CHINESE PEOPLE HOLDINGS COMPANY LIMITED 0.00% 0.05 End-of-day quote.-7.41%
PREMIER, INC. -0.35% 36.64 Delayed Quote.-3.27%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news "Economy & Forex"
07:30aSpain's prime minister reaffirms pledge to curb budget deficit, debt levels
07:25aThailand's $105 billion budget faces further delay
07:22aOil dips as surplus forecast overshadows Libya disruption
07:19aMINISTRY OF FOREIGN AFFAIRS OF PEOPLE REPUBL : Wang Yi Co-chairs the Inaugural Meeting of the Joint Steering Committee between China and Brunei Darussalam with Bruneian Minister of Foreign Affairs II Dato Erywan Pehin Yusof
07:18aCredit Suisse says Mozambique liable for $622 mln loan at heart of bribery scandal
07:17aJ&J misses revenue estimates as blockbuster drugs disappoint
07:16aNEWS HIGHLIGHTS : Top Global Markets News of the Day
07:16aNEWS HIGHLIGHTS : Top Financial Services News of the Day
07:16aNEWS HIGHLIGHTS : Top Company News of the Day
Latest news "Economy & Forex"