US - China Relations: Beijing Adhering To 'Phase One' Deal, Trump Trade Official Says
The Chinese government is adhering to the “Phase One” trade deal with the United States, U.S. Trade Representative Robert Lighthizer told a congressional committee Wednesday. The deal, signed in January, obliges Beijing to buy $200 billion in U.S. agricultural and other goods over the next two years, with Washington suspending planned tariff increases on Chinese products.
“Every indication is that in spite of this COVID-19, [China is] going to do what they say,” Lighthizer said in a hearing before the House Ways and Means Committee. “We have an excellent agreement.”
The “Phase One” deal offered a temporary respite for two countries in the middle of a trade war. In 2018, President Trump slapped tariffs on Chinese goods as a means to make the U.S. more competitive and revive the American manufacturing sector. In response, China decided to implement tariffs of its own on U.S. goods, hurting American farmers.
Lighthizer said China had purchased $1 billion in U.S. cotton this year, which is “way more” than 2017, prior to the trade war. According to China's customs agency, Beijing purchased 35.56 billion yuan ($5.08 billion) of American agricultural goods in the first quarter of the year.
He also advocated more tariffs on Chinese-made medical equipment and protective gear, to encourage American companies to make these products.
“I’m a firm believer that the things we need to fight this and the next pandemic should be made in America,” he said.
In April, trade between China and the United States rose to $39.7 billion, up nearly 43% from the month before. Despite this, U.S.-China trade is below the record $61.4 billion set in October 2018, as the ongoing coronavirus pandemic has negatively impacted the Chinese economy.
In the first quarter of the year, U.S. GDP contracted by 4.8% amid the global coronavirus outbreak, while Chinese growth declined 6.8% during that time period.
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