The Office of the US Trade Representative (USTR) announced Friday [December 13] that both countries had agreed on a “phase one trade deal.”
The agreement reportedly includes requirements on structural reforms and changes to China’s “economic and trade regime” addressing technology transfer, intellectual property, agriculture, financial services and currency and foreign exchange, according to the USTR.
The announced agreement follows a trade war that kicked off in 2018 when the US imposed tariffs on imports from China following the conclusion of a Section 301 investigation examining China’s practices and policies connected to innovation, intellectual property and technology transfer. China responded to the initial imposition of tariffs with a reactive imposition of tariffs on feed ingredients and products from the US.
The early-stage deal includes that China is set to make “substantial additional purchases” of US products and services moving forward, the USTR said. It “establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement.”
In the next two years, China has reportedly committed to importing goods and services that exceed annual import levels by $200bn, the USTR said.
“The Agriculture Chapter addresses structural barriers to trade and will support a dramatic expansion of US food, agriculture and seafood product exports, increasing American farm and fishery income, generating more rural economic activity, and promoting job growth,” the office said. “A multitude of non-tariff barriers to US agriculture and seafood products are addressed, including for meat, poultry, seafood, rice, dairy, infant formula, horticultural products animal feed and feed additives, pet food, and products of agriculture biotechnology.”
The US, meanwhile, is set to alter its Section 301 tariffs.
However, the US is set to keep 25% tariffs on about $250bn in imports from China and 7.5% tariffs on an additional $120bn in imported products from China, added the USTR.
