US and China Confirmed Phase 1 Trade Deal
Senior trade representatives from the United States and China confirmed the consistent implementation of the first phase of the trade deal. At the same time, China is still lagging behind its commitments to buy American goods. On Tuesday, the news brought much-needed relief to all market participants..
The corresponding agreements were reached during telephone conversations between the US Trade Representative Robert Lighthizer, US Treasury Secretary Stephen Mnuchin and Vice Premier of China Liu He. This was their first formal dialogue since early May, amid growing fears that the deal could be called into question amid growing confrontation between countries..
«Both sides see progress and are determined to take the steps necessary to ensure the success of the agreement», – said in a statement by the Office of the United States Trade Representative (USTR) after «regular scheduled call».
Negotiations were originally scheduled for August 15, six months after the start of the trade deal. However, the President of the United States Donald Trump, who has often expressed his dissatisfaction with the Middle Kingdom, said last week that he had postponed negotiations with China because «does not want to deal with them now».
Washington and Beijing exchange sanctions and barbs on a growing list of issues, including Hong Kong’s new national security law, China’s territorial claims in the South China Sea, the COVID-19 pandemic and US accusations of Chinese technology companies at risk of national security.
The Chinese Ministry of Commerce has confirmed that there has been a «constructive dialogue», and agreed to advance the implementation of the first phase of the trade deal.
The US Trade Representative said both sides «reviewed the steps China has taken to bring about structural change» on issues such as protecting intellectual property rights, removing barriers to US companies in the financial services and agriculture sectors, and removing forced technology transfers. «The parties also discussed a significant increase in purchases of American goods by China, as well as future actions required to implement the agreement.», – the message says.
The news of the dialogue between the parties helped to lift the Asian stock markets.
«Negotiations between the US and China are optimistic for most commodities as Trump desperately needs good news to help him in the election, said Ole Howe, Director of Consulting Services at IKON Commodities, an agro-industrial company in Sydney. – This could lead to an increase in demand for products in the United States».
Chinese purchases in the US are lagging behind the pace required to increase their volume by $ 77 billion in the first year under the terms of the deal, according to official figures..
Although China has recently increased its purchases of agricultural commodities, including soybeans, it is far from fulfilling its commitments to buy US agricultural commodities in the amount of $ 36.5 billion under the deal. Trump counted on these purchases to bolster his support in the farming states that backed him in 2016..
The United States exported only $ 7.274 billion worth of agricultural products to China in the first half of the year, according to the US Census Bureau..
In the first half of 2020, China bought only 5% of the US $ 25.3 billion in energy from the United States.Chinese state oil companies chartered tankers to carry at least 20 million barrels of American crude oil in August and September.