China and the US have now made the first part of a new trade deal official.
The world’s two biggest economies have come one step closer to making trade peace following an 18-month battle that has startled investors and held back global economic growth. Chinese Premier Liu He and US President Donald Trump signed the agreement in Washington DC. China has agreed to increase its purchases of US goods and services in several sectors by a cumulative $200 billion over the next two years. In exchange the US will roll back some of the tariffs it has placed on Chinese products imported into the US.
Trump hailed the signing of the phase one agreement as a success, while acknowledging that there is still much work to do to improve Sino-US relations. “Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families,” Trump said at the White House. Liu read a letter from Xi Jinping, who praised the deal as a step in solving disputes between China and the US through dialogue.
While the deal does mean China will be purchasing more US agricultural produce, retaliatory tariffs against US imports into China were not removed. Broken down, China will be making the following additional purchases from the US in the next two years:
- $78 billion in manufactured goods
- $54 billion in energy purchases
- $38 billion in services
- $32 billion in farm products