Some doubts - and tariffs -lingerTop News | AGENCIES 17 Jan 2020
China will boost purchases of US goods and services by US$200 billion (HK$1.56 trillion) over two years in exchange for the rolling back of some tariffs under a phase-one trade deal, defusing an 18-month row that has hit global growth.
Key world stock market indexes climbed to record highs after the deal was signed in Washington, but later stalled on concerns it may not ease trade tensions for long, with numerous thorny issues still unresolved.
While acknowledging the need for further negotiations with China to solve a host of other problems, President Donald Trump hailed the agreement as a win for the US economy and his trade policies.
"Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families," he said in rambling remarks at the White House.
Vice Premier Liu He read a letter from President Xi Jinping that praised the deal as a sign the two countries could resolve their differences with dialogue.
The centerpiece of the deal is a pledge by China to purchase at least an additional US$200 billion worth of US farm products and other goods and services over two years, above a baseline of US$186 billion in purchases in 2017, the White House said.
Commitments include US$54 billion in additional energy purchases, US$78 billion in additional manufacturing purchases, US$32 billion more in farm products and US$38 billion in services.
Liu said Chinese companies would buy US$40 billion in US agricultural products annually over the next two years "based on market conditions" which may dictate timing of purchases in any given year.
Earlier, top White House economic adviser Larry Kudlow said the agreement would add 0.5 percentage point to US gross domestic product growth in both 2020 and 2021.
Aviation sources said Boeing was expected to win a major order for wide-body jets from China, including its 787 or 777-9 models, or a mixture of both.
The deal touted new wins for US companies looking to access China's US$40 trillion financial sector, but many of the changes were already in the works with Beijing stepping up the pace of opening up in the past year.
The deal canceled planned US tariffs on Chinese-made cellphones, toys and laptop computers and halved the tariff rate to 7.5 percent on about US$120 billion worth of other Chinese goods, including TVs, headphones and footwear.
But it will leave in place 25 percent tariffs on a US$250 billion array of Chinese industrial goods and components used by US manufacturers, and China's retaliatory tariffs on over US$100 billion in US goods.
Trump said he would agree to remove the remaining tariffs after a phase-two agreement.
"We've already begun discussions on a phase-two deal," Vice President Mike Pence said.