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Us China Trade Agreement Latest News

Posted by on April 13, 2021

In his January 2020 trade deal with China, President Donald Trump argued that his trade war with China was a success. In its self-proclaimed “historic” agreement, China committed to purchase other U.S. goods and services in 2020 and 2021. Trump even boasted that the deal “could be closer to $300 billion once it`s done.” Trump, who said the trade deal no longer matters as much to him because of China`s handling of the coronavirus pandemic, this week expressed support for the deal and said it should continue and purchases are expected to increase in 2021. 2. On July 6, 2018, the Trump administration imposed its first tariffs on $34 billion worth of Chinese goods. China returned the favour at the same time. The two countries have imposed tariffs until September 2019, together covering more than $450 billion in bilateral trade. The January 2020 agreement applies to U.S. exports of goods and services.

Because detailed data on high-frequency trade for services are not available, these commitments are not assessed here. U.S. sales of cars, trucks and parts also fell to just 33 percent of the previous target. Before the trade war, China was the second largest export market for U.S. vehicles. In July 2018, China returned the favor against Trump`s tariffs with a 25% tariff on U.S. cars. U.S. exports then fell by more than a third due to the relocation of production for Chinese consumers to other sites and the non-recovery of U.S.

exports since then. Tesla, for example, announced in late 2018 that it would accelerate construction of a new plant in Shanghai and relocate U.S. production to Chinese consumers. The company stressed that Trump`s tariffs on auto parts and China`s retaliatory measures against finished cars had not made U.S. exports to China competitive. In response to this trade war policy, BMW relocated part of its production from South Carolina to China.5 Trade experts said there was little political benefit for U.S. President Donald Trump to abandon the deal at the time, which would admit that one of its biggest trade initiatives – already hammered by Democratic rival Joe Biden – had failed. Despite a recent Report by the Trump administration, which suggests another thing, U.S. agricultural exports to China have yet to meet commitments made in the first phase.7 Although better than manufacturing, it was not until September that agricultural exports returned to their pre-market level (Figure 3). In September, they were only 66% of their seasonally adjusted targets. In other words, China will have to import 62% of the total agricultural commitment in October, November and December if it is to meet the 2020 target. The United States reached a Phase 1 trade agreement with China on Friday to avoid the December 15 customs cycle.

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