US-China 'Phase One' Trade Deal To Be Signed This Week

The much-anticipated phase one trade deal between the U.S and China may be signed this week.

According to a report by South China Morning Post on Monday, citing reliable sources, China’s Vice-Premier Liu He will travel to Washington with a delegation to ink the trade deal. However, there is no official confirmation from either side.

“Washington has sent an invitation and Beijing has accepted it,” the Post said citing a source.

US officials hint signing the phase one deal

The plan to sign a phase one deal with China was also indicated by White House trade adviser Peter Navarro to Fox News on Monday.

President Donald Trump last week stated that there would be a signing ceremony between himself and Chinese president Xi Jinping. However, early in December, the U.S. Trade Representative Robert Lighthizer said deputy-level representatives of the two countries might sign the interim trade agreement in the first week of January.

The phase one deal aims the removal of U.S. tariffs on $360 billion worth of Chinese goods “phase by phase.”

The SCMP report said signing the mini trade deal would serve as a truce in the bitter trade war between the two large economies and boost global markets besides brightening the economic growth.

The Chinese newspaper also recalled the background of the interim deal and noted it was worked out on December 13 after intense negotiations and helped in canceling planned tariffs due on December 15. The U.S. also slashed one batch of existing tariffs from 15 percent to 7.5 percent.

However, China has been muted on the details of the pact agreed and only the state media confirmed a deal had arrived, with the text needing to be translated and legally scrutinized.

Cui Tiankai, China’s ambassador to the United States also told China’s state broadcaster CGTN that Beijing would honor its trade deal commitments with the U.S.

Focus on China’s farm products purchase

Under the phase one deal, China has to increase its purchases of American farm products to a total of $40 billion a year, and eventually to $50 billion, per U.S. Trade Representative Robert Lighthizer as reported by the Wall Street Journal.

There is also a “snap back” provision in the phase one deal by which the U.S. can reinstate tariffs in case China backtracks on its agricultural purchasing targets.