US-China Reach "Phase One" Agreement
January 15, 2020
On January 15, 2020, President Trump and Chinese Vice Premier Liu He signed a "Phase One" agreement aimed at lowering the trade tensions between the two countries. The agreement includes several commitments from China to change policies and to purchase U.S. products, but the agreement provides limited relief for importers of products from China that have become subject to 25% or 15% tariffs.
Among the purchases China agreed to make of U.S. products are about $77 billion in industrial goods and $32 billion in agricultural products. Another $52 billion will come from the energy sector. Those purchases are to take place over the next two years.
Other aspects of the agreement include:
• China will further open its market for U.S. beef and poultry
• China will improve enforcement of U.S. intellectual property rights
• China will increase access to U.S. finances services companies
• China will make changes to its exchange rate policies (the U.S. already removed the “currency manipulator” designation from China)
Read the full text of the agreement here.
The tariffs the U.S. previously imposed under Section 301 will remain largely in place. The Office of the USTR has issued a Federal Register Notice stating that the present 15% tariff applicable to Chinese-origin goods on List 4A will be reduced to 7.5% for goods entered or withdrawn from consumption on or after February 14, 2020.