US, China Delay Review of Phase 1 Trade Agreement So Beijing Has Time To ‘Buy More Goodies’ From America

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Le Washington Post

  • The United States and China have postponed consideration of their Phase 1 trade deal, originally slated for Saturday, Reuters reported.
  • Sources familiar with the plans told the news agency that the meeting was postponed due to scheduling conflicts and the need to give China more time to purchase U.S. exports under the trade deal.
  • “Unlike most US-Chinese talk these days, the tone on both sides was refreshing politeness and civilization,” said a senior market analyst at OANDA.
  • Data shows that China’s imports of U.S. agriculture and manufactured goods, energy and services are lagging behind the pace required to meet a year one increase target of $ 77 billion from 2017 purchases , Reuters said.
  • Visit the Business Insider homepage for more stories.

The United States and China have postponed a review of their Phase 1 trade deal that was originally scheduled for Saturday, according to a Reuters report.

No new date has been agreed for a review of the agreement signed in January.

Sources told Reuters that the reason for the postponement was conflicting timetables between the two sides and the desire to give China more time to meet its commitments to purchase certain quantities of US goods.

A conference for top Chinese Communist Party leaders was scheduled for the same day as the US talks and resulted in a delayed review of the deal, the news agency said.

Apart from that, U.S. officials wanted China to have more time to step up its purchases of U.S. products in accordance with the agreed deal.

Jeffrey Halley, senior market analyst at OANDA, described the postponement as giving China “more time to buy more goodies from Americans.”

“Unlike most US-Chinese talk these days, the tone on both sides was refreshingly polite and civilized,” he said.

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Officials of the two countries were due to hold talks on Saturday, the sixth anniversary of the signing of the agreement on February 15, during a conference call. The meeting was intended to review the progress of the agreement for the first half of the year.

“Considering the chaos of the past two months, this has at least kept things from getting worse,” said Connor Campbell, financial analyst at SpreadEx.

China is the United States’ third largest export market and buys airplanes, machinery, medical and agricultural products, and much more.

The deal requires China to increase its purchases of US agricultural and manufactured goods, energy and services by $ 200 billion over the next two years. This is all on top of the purchases made in 2017. The data suggests that China is far from reaching this target.

China’s total product imports from the United States totaled $ 40.2 billion, compared to a pro-rata year-to-date total of $ 86.3 billion. This means that China’s compliance was less than 50%.

However, since the coronavirus lockdown restrictions were relaxed, purchases from China have increased. The US Department of Agriculture on Friday announced the sale of 126,000 tonnes of soybeans to China, the eighth consecutive weekday of significant sales to China.

Officials in President Trump’s administrations have indicated they are happy with the pace of the deal and have no plans to abandon the deal.

The deal would also include increased access for U.S. financial firms to China, stronger intellectual property protections, and the removal of some agricultural trade barriers.

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