President Trump has agreed to an initial trade agreement with China that will roll back existing tariff rates on Chinese goods and cancel new levies set to take effect Sunday as part of a deal to boost Chinese purchases of U.S. farm goods and obtain other concessions, the Wall Street Journal reports, citing “people familiar with the matter.”
Lingling Wei, Bob Davis, William Mauldin, and Josh Zumbrun for The Wall Street Journal:
Michael Pillsbury, an adviser to the president, said he spoke with Mr. Trump, who said the deal calls for China to buy $50 billion worth of agricultural goods in 2020, along with energy and other goods. In exchange the U.S. would reduce the tariff rate on many Chinese imports, which now ranges from 15% to 25%.
The Wall Street Journal reported earlier Thursday that the U.S. side has offered to slash existing tariff rates by half on roughly $360 billion in Chinese-made goods, in addition to canceling the tariffs on $156 billion in goods that Mr. Trump had threatened to impose on Sunday. That offer was made to Beijing in the past five days or so.
Should Beijing fail to make the purchases it has agreed to, original tariff rates would be reimposed. Trade experts call that a “snapback” provision, though the president didn’t use that term, Mr. Pillsbury said.
“The president is upbeat and enthusiastic about his breakthrough,” according to Mr. Pillsbury, a China scholar at the Hudson Institute who advises the Trump administration.
The president has stressed that a so-called phase one deal—which also includes measures to improve intellectual property protection, open the Chinese financial services market and prevent currency manipulation—is expected to lead to a phase two deal. That agreement would tackle more difficult problems, including forced-technology transfer, subsidies, and the behavior of Chinese state-owned firms.
MacDailyNews Take: Update, 9:38am ET: President Trump disputes the content of the WSJ article above:
The Wall Street Journal story on the China Deal is completely wrong, especially their statement on Tariffs. Fake News. They should find a better leaker!
— Donald J. Trump (@realDonaldTrump) December 13, 2019
Again, here’s hoping “Phase One” starts the U.S. and China on the road to a more balanced relationship.
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018
The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!
— Donald J. Trump (@realDonaldTrump) June 24, 2018
At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006
I am surprised at the lack of a flood of partisan commentary. But that is nice. Let’s look at this situation objectively.
1) The “deal” is an initial, phase 1 agreement, the details of which have not been released.
2) The U.S. agreed not to impose additional tariffs
3) The U.S. agreed to partially roll back a previous set of tariffs on $156B in goods from a rate of 15% to a rate of 7.5%
4) China agreed to buy some amount of U.S. agricultural goods which it was already buying prior to the trade war
5) China has apparently agreed to new rules on intellectual property (IP), trade, and other things, but these new rules have not yet been divulged
6) As far as I can tell, nothing has been signed. Let me know when something substantive is signed, or it is just another bunch of malarky like the “agreements” with North Korea.
I sincerely hope that this all works out for the best. But the evidence over the last three years is that preliminary agreements have been excessively hyped with relatively little to show months and years later, despite the claims of incredible success “like nothing you have ever seen before.”
I’ll believe there’s a phase one deal when the agreement is made public and is in print, and signed by both presidents. Anything else up to that point is just a smokescreen for the mess Trump has created. Just another announcement intended to move the stock market. Failure to carry out the threat to up tariffs on Dec. 15th does not a deal make.
Typical Trump bluster: make lots of threats, then declare victory when you don’t (can’t) carry them out.
https://www.zerohedge.com/markets/art-secret-deal-terms-phase-1-deal-will-never-be-made-public
It’s nice there’s no partisan vitriol….
The king speaking to his subjects has no idea he’s speaking downward while doing the thing he speaks against.
Perennial problem with leftists. Blame others for what you yourself are doing.
The king word is hypocrisy…
Yes, that’s really what Donny should have said…he gets all philosophical about these things.
I’ll add, the people on the left don’t really think they’re fallible–it’s just the d-asses on the right. In fact, because their “correctness” they don’t see their bias.
Me and my husband, Donnie, know we’re biased and know we’re wrong. After all, we’re deplorable.
Well even if the orange monkey agrees to that, he would flop the next day for sure.