This post was originally published on this site
Getty Images President Donald Trump, flanked by China’s Vice Premier Liu He, speaks ahead of signing the phase-one trade agreement in the East Room of the White House on Wednesday.
President Donald Trump on Wednesday signed the first stage of a U.S.-China agreement that represents a truce in the long-running trade war between Washington and Beijing, calling it a “great deal for both countries.”
Trump, joined at the White House by Chinese Vice Premier Liu He, called the deal “a landmark agreement” before an audience of lawmakers, corporate executives and administration officials. Both men signed the agreement in the ornate East Room.
U.S. officials including White House National Economic Council Director Larry Kudlow described the deal before the ceremony. Speaking on CNBC Wednesday morning, Kudlow said the preliminary pact boosts Chinese purchases of U.S. agricultural, manufacturing and other goods, and includes enforcement mechanisms. China has pledged to increase its purchases of U.S. goods and services by $200 billion over two years.
Though the deal cuts U.S. tariffs to 7.5% on around $120 billion in Chinese products, it keeps in place levies on some $380 billion of Chinese imports, U.S. Trade Rep. Robert Lighthizer said. Kudlow said the U.S. will take “proportionate actions” if China doesn’t live up to its commitments, and defended Trump’s use of import duties to spur Beijing to negotiate.
Now see: What the U.S.’s ‘Phase 1’ trade deal with China does and doesn’t do.
“The U.S.-China phase-one deal is essentially a trade truce, with large state-directed purchases attached. The truce is good news for the U.S. and the world economy,” said trade economist Mary Lovely of the Peterson Institute for International Economics, in note.
“China will open itself even wider,” Liu said in his remarks at the White House.
China will make agricultural purchases worth between $40 billion to $50 billion under the deal, Vice President Mike Pence said at the ceremony.
The text of the deal hadn’t been released as of early Wednesday afternoon. The Wall Street Journal reported that under the agreement, China has pledged to give U.S. companies greater access to its financial services sector; to refrain from devaluing the yuan USDCNY, -0.1507% to help its exporters; and to somewhat enhanced protection of U.S. intellectual property for such products as pharmaceuticals.
“There remains considerable ground yet to be covered in terms of protecting intellectual property and counterfeit of goods among other issues before a meaningful trade agreement is met between the world’s two largest economies,” said Stifel Chief Economist Lindsey Piegza in a note. “China has a history of making deals and failing to follow through,” she added.
Ahead of the signing, the Dow Jones Industrial Average DJIA, +0.40%, the Nasdaq Composite Index COMP, +0.15% and S&P 500 index SPX, +0.17% all set new intraday highs, but were trading off their peaks Wednesday afternoon.
Now read: Market Snapshot.
Kudlow told Fox News on Wednesday that Washington and Beijing will begin talks on phase two of the deal “immediately,” but Chinese media has reported those negotiations may not begin soon.
Trump said the tariffs that remain would be removed pending progress on the second phase of negotiations.
“We’re leaving tariffs on, but I will agree to take those tariffs off if we are able to do phase two,” Trump said.
