China has agreed to buy $32 billion of additional U.S. farm products over two years as part of a phase one trade pact, U.S. Trade Representative Robert Lighthizer told reporters on Friday, adding the deal would be signed the first week of January.
As part of the agreement, Beijing agreed to buy roughly $16 billion more in American agricultural products in each of those years, adding to the 2017 baseline of $24 billion, Lighthizer added, but Beijing agreed to strive for some $5 billion in additional purchases each year.
That would add up to the $40 billion to $50 billion in added Chinese agriculture purchases that President Donald Trump had promised when he first announced the agreement on Oct. 11.
Overall, China had committed to important structural changes and to buying $200 billion more in U.S. goods and services over two years, focused on four areas – manufacturing, energy, agriculture and services, Lighthizer said.
The agreement, hammered out in detailed negotiations between the two sides over the past two months, ends 17 months of tit-for-tat tariffs that have roiled financial markets and dragged global growth lower.
Lighthizer said there would be specific targets for Chinese purchases of specific products, but those would not be made public to avoid distorting markets.
He insisted the trade agreement was compliant with World Trade Organization rules, adding that China would be free to buy things when “it’s the perfect time in the market to buy things.”
Asked about what happened between Oct. 11 and now, Lighthizer said that time was spent on getting to specifics on the meaning of words in the agreement. Those discussions continued until Friday morning, he said, noting that he got the final go-ahead from the president just after 10 a.m.
Lighthizer, who also completed work on an even larger U.S.-Mexico-Canada trade agreement earlier this week, said he was battling laryngitis and was looking forward to “going home” for Christmas after the nonstop negotiations of recent months.
The agreement will reduce some U.S. tariffs on Chinese goods, and indefinitely puts off further 15% tariffs that were due to go into effect on Sunday, Lighthizer said. The lower tariff rates will go into effect 30 days after the deal is signed, which will likely occur in Washington in early January.
He said he did not expect the United States to impose any additional tariffs against China, outside of potential changes resulting from an enforcement mechanism agreed by both sides.
He said the deal included important structural changes by China – including important commitments on ending pressure for U.S. companies who do business in China to transfer their technology, and improved protections for intellectual property.
But he conceded that there was still far more work to do. Discussions about a next phase agreement would begin at an appropriate time, he said, adding that Trump did not want to wait until after the 2020 presidential election.