Logo
Friday, 29 March 2024
Wednesday, 15 Jan 2020 02:00 pm

United States and China to sign an initial trade deal aiming vastly at increasing Chinese purchases of U.S. manufactured products

Beijing will boost energy purchases by some $50 billion and services by $35 billion, while agricultural purchases will get a $32 billion lift over the two years, all compared to a 2017 baseline of U.S. exports to China, the source said.

newsImage
 

The U.S.-China trade war is set to enter a new, quieter phase on Wednesday as U.S. President Donald Trump and Chinese Vice Premier Liu He sign an initial trade deal that aims to vastly increase Chinese purchases of U.S. manufactured products, agricultural goods, energy and services.

The Phase 1 agreement caps 18 months of tariff conflict between the world’s two largest economies that has hit hundreds of billions of dollars in goods, roiling financial markets, uprooting supply chains and slowing global growth.

Trump and Liu are scheduled to sign the 86-page document, at a White House event before over 200 invited guests from business, government and diplomatic circles.

A translation of the text to Chinese was still being completed late on Tuesday afternoon, as Liu met with U.S. Trade Representative Robert Lighthizer.

Trump has already begun touting the trade deal as a centerpiece of his 2020 re-election campaign, calling it “a big beautiful monster” at a rally in Toledo, Ohio last week.

“Our farmers will take it in. I keep saying, ‘Go buy larger tractors, go buy larger tractors,’” Trump said.

The centerpiece of the deal is a pledge by China to purchase an additional $200 billion worth of U.S. goods over two years to cut a bilateral U.S. trade deficit that peaked at $420 billion in 2018.

A source briefed on the agreement told Reuters that China will purchase an additional $80 billion worth of U.S. manufactured goods over the two year period, including aircraft, autos and car parts, agricultural machinery and medical devices.

Beijing will boost energy purchases by some $50 billion and services by $35 billion, while agricultural purchases will get a $32 billion lift over the two years, all compared to a 2017 baseline of U.S. exports to China, the source said.

When combined with the $24 billion in 2017 farm exports, the $16 billion annual increase approaches Trump’s goal of $40 billion to $50 billion in annual agricultural sales to China.

Although the deal could be a big boost to farmers, planemaker Boeing (BA.N), U.S. automakers and heavy equipment manufacturers, some analysts question China’s ability to divert imports from other trading partners to the United States.

Read here


Neha Pandey

Aware of her elements, Neha writes the best articles across industries including electronics & semiconductors, automotive & transportation and food & beverages. Being from the finance background she has the ability to understand the dynamics of every industry and analyze the news updates to form insightful articles. Neha is an energetic person interested in music, travel, and entertainment. Since past 5 years, she written extensively on sectors like technology, finance and healthcare.


Smarter Decisions with Smart News

Smart Market News is committed to getting its readers the latest updates and insights on industries that help in making “smarter” business decisions. With insights and inputs from corporate decision makers, we bring you the stories of adopting innovative solutions and strategies that have been changing the world. Our editorial insights on products, solutions, companies, and adoption of best practices not only help in understanding the markets better, but also prove to be a complete package for your information needs.

Subscribe to our newsletter
Get the latest in your inbox weekly Sign up for the fully charged newsletter
© The News and Media Division of The Insight Partners 2024 | All Rights Reserved | Privacy Policy