BEIJING (Reuters) – U.S. President Donald Trump has directed federal agencies to assess China’s performance under the Phase 1 trade deal that he signed with Beijing in 2020 during his first term at the White House.
DETAILS OF 2020 DEAL
The deal had required China to increase purchases of U.S. exports by $200 billion over a two-year period, but Beijing failed to meet its targets when the COVID-19 pandemic struck.
As part of the deal, the United States cut by half the tariff rate it imposed in September 2019 on a $120 billion list of Chinese goods, to 7.5%.
Tariffs originally scheduled for December 2019 on nearly $160 billion worth of Chinese goods, including cellphones, laptop computers, toys and clothing, were suspended.
But U.S. tariffs of 25% on $250 billion worth of Chinese goods put in place earlier remained unchanged.
Below are details of the deal according to the text of the Phase 1 agreement released by the office of the U.S. Trade Representative.
CHINA PURCHASES
China agreed to increase purchases of American products and services by at least $200 billion over two years, over a baseline established in 2017, with increased imports of U.S. goods and services to “continue on this same trajectory for several years after 2021.”
China bought $130 billion in U.S. goods in 2017, before the trade war began, and $56 billion in services, U.S. data show.
In 2020, China imported $135 billion of U.S. goods, and a year later, it bought $178 billion, according to data from Chinese customs.
INTELLECTUAL PROPERTY
The deal included stronger Chinese legal protections for patents, trademarks, copyrights.
It contained 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.
CURRENCY
The currency agreement contains pledges by China to refrain from competitive currency devaluations and to avoid manipulating exchange rates for competitive advantage.
Any violations would be subject to the enforcement mechanism for the overall deal, and could trigger tariffs. Both countries also agreed to publish relevant data on exchange rates and external balances on a prescribed schedule.
This post is originally published on INVESTING.
