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 By Heather SCOTT Washington (AFP) Dec 14, 2019
US officials announced a truce in the trade war with China with much fanfare, but economists and trade experts call it largely a victory for Beijing. After a dispute that raged for close to two years, with several fumbled efforts at a resolution, the US agreed to cancel planned tariffs and rollback others immediately, without a similar commitment from China to lift tariffs it imposed on the US. "Pardon me if I don't pop champagne, but aside from a cessation of continued escalation, there is not much worth cheering," leading China expert Scott Kennedy said in an analysis of the agreement. "The costs have been substantial and far reaching, the benefits narrow and ephemeral." The US Trade Representative office said they expect to sign the phase one agreement in the first week of January, and issued a fact sheet highlighting key points, including enforcement provisions and improved protection for American technology. In addition, it includes a Chinese commitment to buy $200 billion more in US goods and services over two years, USTR said. That would be a significant increase: China imported just shy of $190 billion in goods and services in 2017, so if the target is met it would cut the US trade deficit with China by a third. President Donald Trump has long railed against the trade imbalance, citing it as proof China is using distorting policies to gain an unfair advantage. Trump tweeted that Beijing "agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more." - Back from the brink - Alliance for American Manufacturing President Scott Paul said agreeing to remove tariffs amounted to "giving away much of our leverage, while kicking the can down the road on the most meaningful trade issues with China." And trade economist Mary Lovely said the deal could only be viewed as a "partial win" which "didn't move the needle very much." "We were kind of on a brink, and we saw the negotiators reach a deal that pulled us back, and I think that is important," she said of the news Trump canceled the 15 percent tariffs on electronics that were due to hit Sunday. But the gains in the deal do not compensate for the damage to US farmers and businesses, she told reporters. "President Trump is desperately trying to get back to where the economy was 18 months ago," before taking this "unilateral, brute force approach," Lovely said. But Kennedy said that in exchange for "only limited concessions, China has been able to preserve its mercantilist economic system and continue its discriminatory industrial policies at the expense of China's trading partners and the global economy." US farmers and retailers welcomed the end to the dispute, but also wanted to see more information. American Farm Bureau Federation President Zippy Duvall noted that prior to the eruption of hostilities China was the second-largest market for US agricultural products, but dropped to fifth. "Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet," Duvall said in a statement. In addition to the collapse in exports, and surge in farm bankruptcies, the US government has paid tens of billions of dollars in aid to farmers to compensate for lost sales -- funds that come from tariffs paid by US consumers and businesses. The National Retail Federation, which has long opposed US tariffs, particularly the last two rounds which hit consumer products in particular, said "the trade war won't be over until they are eliminated completely."
Key points in the US-China 'phase one' deal The agreement came two months after US President Donald Trump first announced a "phase one" deal. Below are major elements of the deal announced Friday. - Agreement in principle - The world's top two economies -- which engage in over $730 billion two-way trade annually -- have yet to sign the text of the deal but say they have a bargain in principle. US officials say they expect to sign the pact in early January after a legal review and once they have made certain the English and Chinese versions of the text are equivalent. Officials will work diligently to complete a legal review and translations of the text before a final signing, Wang Shouwen, deputy minister of commerce, said Friday. - Areas covered - US and Chinese officials said the agreement includes protections for intellectual property, food and farm goods, financial services and foreign exchange, and a provision for dispute resolution. "Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement," US Trade Representative Robert Lighthizer said in a statement Friday. US officials have long said enforcement was crucial to ensuring that China holds up its end of the bargain, an area of nagging skepticism. - Boost for US agriculture - Trump has promised that any deal would include a commitment from China for a massive increase in purchases of US farm products. At the White House Friday he said, "I think in agriculture they will hit $50 billion." But US officials told reporters China's commitments for imports of $200 billion in all across four sectors including energy and manufacturing, would unfold over two years. For agriculture, that would mean a return to 2017 levels when American farmers exported $19.5 billion in products to China. Those exports tumbled by more than $9 billion in 2018 as the trade war began and Beijing retaliated against US tariffs with punitive duties. Han Jun, vice minister of agriculture in Beijing, said the partial agreement also would boost China's farm exports to the United States, including cooked poultry, pears and dates. "Some of these problems have been talked about for more than 10 years, and this time there has been a substantive breakthrough," he said. - Tariffs on hold - As part of the deal, Trump canceled 15 percent tariffs that had been due to hit Sunday on $160 billion in Chinese goods, especially electronics likes cell phones and computers, which would have been particularly painful to US consumers. And in a major concession, the US will slash in half the 15 percent tariffs on another $120 billion imposed September 1, on consumer goods like clothing. While Chinese officials said the US agreed to roll back the other tariffs in stages, for now Washington will keep in place the 25 percent duties on $250 billion in imports. China's Vice Finance Minister Liao Min did not specify whether Beijing planned to cancel existing tariffs on US imports to China. In September, Beijing removed tariffs imposed on 16 categories of US products.
Chinese businesses boost self-reliance as trade war rolls on Beijing (AFP) Dec 12, 2019 Whether Beijing and Washington reach a trade deal or not, China is already speeding up efforts to break its reliance on a country that is one of its biggest economic partners but also its biggest adversary. The effort has gained greater urgency for Beijing after more than a year and a half of protracted negotiations, painful tariffs and US sanctions against leading Chinese technology companies. Negotiators are working towards a potential "phase one" deal but tensions could escalate again if Pres ... read more
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