Trump says he’ll sign first-step China trade deal on Jan. 15

Trump says he’ll sign first-step China trade deal on Jan. 15

WEST PALM BEACH, Fla. — The first phase of a U.S.-China trade agreement will be inked at the White House in mid-January, President Donald Trump announced Tuesday, adding that he will visit Beijing at a later date to open another round of talks aimed at resolving other sticking points in the relationship.

The so-called “Phase One” agreement is smaller than the comprehensive deal Trump had hoped for and leaves many of the thorniest issues between the two countries for future talks. Few economists expect any resolution of “Phase Two” before the presidential election in 2020.

And the two sides have yet to release detailed documentation of the pact, making it difficult to evaluate.

Trump said high-level Chinese government officials will attend the signing on Jan. 15 of “our very large and comprehensive Phase One Trade Deal with China.”

“At a later date I will be going to Beijing where talks will begin on Phase Two!” Trump said in his tweet. He did not announce a date for the visit.

China has agreed to boost its U.S. goods imports by $200 billion over two years, the U.S. Trade Representative said Dec. 13 when the deal was announced. That includes increased purchases of soybeans and other farm goods that would reach $40 billion a year.

China has also agreed to stop forcing U.S. companies to hand over technology and trade secrets as a condition for gaining access to China’s vast market, demands that had frustrated many U.S. businesses.

In return, the Trump administration dropped plans to impose tariffs on $160 billion of Chinese goods, including many consumer items such as smartphones, toys and clothes. The U.S. also cut tariffs on another $112 billion of Chinese goods from 15% to 7.5%.

Many analysts argue that the results are fairly limited given the costs of the administration’s 17-month trade war against China. U.S. farm exports to China fell in 2018 to about one-third of the peak reached six years earlier, though they have since started to recover.

Import taxes remain on about half of what the U.S. buys from China, or about $250 billion of imports. Those tariffs have raised the cost of chemicals, electrical components and other inputs for U.S. companies. American firms have cut back on investment in machinery and other equipment, slowing the economy’s growth this year.

A study last week by economists at the Federal Reserve found that all of the Trump administration’s tariffs, including those on steel and aluminum as well as on Chinese imports, have cost manufacturers jobs and raised their costs. That’s mostly because of retaliatory tariffs imposed by China and other trading partners.

Many experts in both the U.S. and China are skeptical that U.S. farm exports can reach $40 billion. The most the U.S. has ever exported to China before has been $26 billion. China has not confirmed the $40 billion figure.

Still, the agreement has helped calm concerns in financial markets and among many U.S. businesses that the trade war with China would escalate and potentially lead to a recession. The approval by the Democratic-led House of the Trump administration’s revamp of the NAFTA agreement has also reduced uncertainty around global trade.

Since the U.S.-China pact was first announced in October, the stock market has risen steadily and is on track to finish the year with its biggest gain since 2013. Most analysts now forecast that the economy will grow at a steady if modest pace in 2020, extending the current record-long expansion.

The Phase 1 deal has left some major issues unresolved, notably complaints that Beijing unfairly subsidizes its own companies to give them a competitive advantage in world markets.

The Trump administration argues — and independent analysts agree — that China uses the subsidies in an effort to gain an advantage in cutting-edge fields such as driver-less cars, robotics and artificial intelligence.

Another sticking point in future talks will likely involve rules around data flows, with China looking to require more foreign companies to keep data they use in China as opposed to stored overseas.

“It’s a very toxic brew and I don’t know that we’re really going to see much progress on it,” said Mary Lovely, a trade economist at the Peterson Institute for International Economics.

Just Posted

An incredible closing ceremony capped off the 2019 Canada Winter Games. (File photo by SUSAN JUDGE/2019 Canada Winter Games)
2019 Canada Winter Games Legacy Fund Society hands out $655,000

35 not-for-profit groups across Alberta to get money

Dr. Verna Yiu, president and chief executive officer of Alberta Health Services, says COVID ICU patients have increased by more than 100 per cent in the past month. (Photo by The Government of Alberta)
Record number of people in ICU: says AHS president

The head of Alberta Health Services says hospital staff are treating more… Continue reading

The Red Deer Rebels have acquired goaltender Connor Ungar from the Brandon Wheat Kings, the team announced Monday. (File photo by Advocate staff)
Red Deer Rebels acquire goaltender Connor Ungar, forward Liam Keeler in separate trades

The Red Deer Rebels have acquired goaltender Connor Ungar from the Brandon… Continue reading

Alexander Michael Talbot, 29, was found guilty of operating a vehicle while prohibited, flight from police and vehicle theft in Red Deer provincial court recently. (Advocate file photo)
Man charged following police chases in central Alberta last summer is sentenced

Alexander Michael Talbot sentenced to 22 months in prison

Red Deer musician Curtis Phagoo is glad the Alberta government is investing $2 million to help the province’s live music industry, but he would have liked the criteria to be expanded, so the money could be used as relief to cover revenue shortfalls. (Contributed photo by Cory Michaud)
Red Deer musicians welcome $2M in grants to help live music, but would have preferred relief program

The money is for future projects and can’t be used for retroactive expenses

Conservative Leader Erin O'Toole holds a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Liberals tap another military officer to replace Fortin on vaccine campaign

Liberals tap another military officer to replace Fortin on vaccine campaign

Maricopa County ballots cast in the 2020 general election are examined and recounted by contractors working for Florida-based company, Cyber Ninjas, Thursday, May 6, 2021 at Veterans Memorial Coliseum in Phoenix. The audit, ordered by the Arizona Senate, has the U.S. Department of Justice saying it is concerned about ballot security and potential voter intimidation arising from the unprecedented private recount of the 2020 presidential election results. (AP Photo/Matt York, Pool)
Republican Arizona election official says Trump “unhinged”

Republican Arizona election official says Trump “unhinged”

In this June 29, 2020 file photo, the Supreme Court is seen on Capitol Hill in Washington. (AP Photo/Patrick Semansky)
Supreme Court to take up major abortion rights challenge

Supreme Court to take up major abortion rights challenge

FILE - In this May 14, 2021, file photo, signs instruct visitors on the proper way to wear masks at the Universal City Walk in Universal City, Calif. California is keeping its rules for wearing facemasks in place until the state more broadly lifts its pandemic restrictions on June 15. State officials said Monday, May 17 that the delay will give people time to prepare, and for the state to make sure that virus cases stay low. (AP Photo/Marcio Jose Sanchez, File)
California will stay masked for another month

California will stay masked for another month

Israelis take cover as a siren sounds a warning of incoming rockets fired from the Gaza Strip, in Ashkelon, southern Israel, Sunday, May 16, 2021. (AP Photo/Heidi Levine)
Israel strikes Gaza tunnels as truce efforts remain elusive

Israel strikes Gaza tunnels as truce efforts remain elusive

Mi’kmaq filmmaker Jeff Barnaby on pushing boundaries, pursuing his vision

Mi’kmaq filmmaker Jeff Barnaby on pushing boundaries, pursuing his vision

Daniel Levy, co-creator and one of the stars in the TV series "Schitt's Creek" poses for a portrait during the 2018 Television Critics Association Winter Press Tour in Pasadena, Calif., Sunday, Jan. 14, 2018. THE CANADIAN PRESS/AP-Photo by Willy Sanjuan/Invision/AP
Daniel Levy exploring animation, thriller and rom-com worlds post-‘Schitt’s Creek’

Daniel Levy exploring animation, thriller and rom-com worlds post-‘Schitt’s Creek’

A vial of AstraZeneca vaccine is seen at a mass COVID-19 vaccination clinic in Calgary, Alta., Thursday, April 22, 2021. Dr. Ben Chan remembers hearing the preliminary reports back in March of blood clots appearing in a handful of European recipients of the Oxford-AstraZeneca COVID-19 vaccine. THE CANADIAN PRESS/Jeff McIntosh
Science on COVID, VITT constantly changing: A look at how doctors keep up

Science on COVID, VITT constantly changing: A look at how doctors keep up

Most Read