US China trade
Chinese Deputy Director of Central Commission's Office for Financial and Economic affairs Liao Min speaks to the media after a news conference on the state of trade negotiations with US in Beijing, China December 13, 2019. Image Credit: Reuters

WASHINGTON, Beijing: The United States agreed to modify its tariffs on Chinese goods in a “significant way” under a phase one trade agreement with Beijing, while China would buy substantially more US goods and services, the US Trade Representative’s office said yesterday.

Under the agreement, Washington will maintain 25 per cent tariffs on about $250 billion of Chinese imports, and reduce to around 7.5 per cent tariffs imposed on $120 billion of other Chinese imports, USTR said in a statement.

It said the trade agreement required structural reforms to China’s economic and trade regime in areas of intellectual property, technology transfer, agriculture, financial services, currency and foreign exchange. The deal also includes a ‘strong dispute resolution system’, USTR said.

China also announced yesterday a “phase one” trade deal with the United States that includes a progressive rollback of tariffs and the protection of intellectual property rights.

The announcement came a day after President Donald Trump tweeted that the world’s two biggest economies were very close to a “BIG DEAL” in their protracted trade dispute.

Chinese vice commerce minister Wang Shouwen told reporters Washington agreed to a “phasing out” of tariffs on Chinese goods. Vice finance minister Liao Min said China would not introduce tariffs on US products that had been planned as retaliation for US tariffs on Chinese products tomorrow.

Inclusions

Wang said the agreement includes strengthening the protection of intellectual property rights, expanding market access and safeguarding the rights of foreign companies in China — issues at the heart of US complaints about Beijing’s restrictive economic policies.

US media reports said China would spend $50 billion on US farm goods — a major Trump request — but Chinese officials did not provide any figures at a press briefing in Beijing. “The two countries have agreed on the text of a phase one trade and economic deal,” Wang said at the news conference.

“Both parties agree that in the next step, both parties will complete the necessary procedures for legal review and translation school equivalence as soon as possible, and negotiate the specific arrangements for the formal signing of the agreement,” Wang said.

“After the signing of the agreement, it is hoped that both sides will abide by the agreement, work hard to implement the relevant contents of the first phase of the agreement.”