While the U.S. and China earlier this year announced a so-called “phase one” trade deal, questions remained about commitments and the enforcement of the deal’s provisions.
As such, despite forestalling the implementation of new planned tariffs, the U.S. opted to maintain the bulk of the previously imposed tariffs on Chinese goods, amounting to roughly $370 billion.
At the time, President Donald Trump said the U.S. would leave the tariffs in place, but could remove them if a phase two deal is struck; however, it remembers to be seen when, or if, such a deal will be reached between the world’s two largest economies.
“President Trump signed the Phase One agreement a little more than a month ago and we are already seeing positive results,” United States Trade Representative Robert Lighthizer said in a release this week. “Under the President’s leadership, we will ensure the agreement is strictly enforced for the benefit of our workers, farmers, ranchers and businesses.”
The deal came two years after the USTR launched a Section 301 investigation of unfair Chinese trade practices.
The deal signed in January calls for China to ramp up its purchases of U.S. agricultural goods, manufactured goods, energy goods and services.
“During the two-year period from January 1, 2020 through December 31, 2021, China shall ensure that purchases and imports into China from the United States of the manufactured goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the corresponding 2017 baseline amount by no less than $200 billion,” Article 6.2 of the agreement text stated.
Amid already slowing economic growth, however, and the impact of the coronavirus outbreak, questions have been raised regarding the feasibility of China’s ability to fulfill those lofty numbers.
But the USTR this week touted a number of measures aimed at implementing the agricultural provisions of the trade deal.
Among them, the USTR said the countries had signed the U.S. Chipping Potatoes Protocol Announcement, which will allow for the importation of U.S. fresh chipping potatoes into China. In addition, the Poultry and Poultry Products Announcement lifts China’s ban on imports of those products (including pet food containing poultry products).
The USTR noted the U.S. and China also agreed to:
- Lift restrictions on imports of U.S. pet food containing ruminant material (Pet Food with Ruminant Ingredients Announcement)
- Update lists of facilities approved for exporting animal protein, pet food, dairy, infant formula, and tallow for industry use to China;
- Update the lists of products that can be exported to China as feed additives
- Update an approved list of U.S. seafood species that can be exported to China
On the tariff front, “China has begun announcing tariff exclusions for imports of U.S. agricultural products subject to its retaliatory tariffs (Tariff Exclusion Process Announcement), and it announced a reduction in retaliatory tariff rates on certain U.S. agricultural goods (Tariff Rate Adjustment Announcement),” the USTR said.