‘Landmark’ trade deal expected to generate $200 billion in U.S. exports to China

PROMO 64J1 Business - Economy Trade War United States Sign - iStock - Darwel
Published Thursday, January 16, 2020

By Bruce Walker | The Center Square

Local and national government officials and agricultural advocates are expressing their respective pleasure over Wednesday's signing of the first phase of a sweeping trade deal between China and the United States.

Among the provisions of the deal are agreements from China to import an additional $32 billion in agricultural products; $80 billion in manufactured goods; $50 billion in energy products; and $35 billion in other services.

Described by the Wall Street Journal as a "landmark deal," the agreement also is intended to protect intellectual property of U.S. companies with operations in China as well as opening Chinese markets to U.S. financial services. In return, the United States will cut tariffs by half, or 7.5 percent, on imported Chinese goods and postpone additional tariffs.

The deal will also promote increased exports of U.S. food, agriculture and seafood products, which the U.S. Department of Agriculture (USDA) anticipates will grow "American farm and fishery income, generating more rural economic activity, and promoting job growth."

Specifics of Phase One of the trade deal will not be revealed until Thursday. Wednesday's signing of the treaty, however, is being greeted as a cease fire in the trade wars that have roiled worldwide markets for the past year.

"This is a very important and remarkable occasion," President Donald Trump said at the signing. "Together we are righting the wrongs of the past."

The treaty was signed the same that that U.S. House voted to send two articles of impeachment to the U.S. Senate.

According to the USDA, "A multitude of non-tariff barriers to U.S. agriculture and seafood are addressed, including for meat, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food, and products of agriculture biotechnology."

U.S. Secretary of Agriculture Sonny Perdue said in a statement: "This agreement is proof President Trump's negotiating strategy is working."

Perdue continued: "While it took China a long time to realize President Trump was serious, this China Phase I Deal is a huge success for the entire economy. This agreement finally levels the playing field for U.S. agriculture and will be a bonanza for America's farmers, ranchers, and producers," he said.

State Rep. Matt Hall, R-Marshall, attended the signing in Washington.

"For years, China has taken advantage of the United States with unfair trade barriers and practices that cost American jobs," he said. "I am grateful President Trump has remained tough with China and negotiated an agreement that puts America first by rebalancing trade with China."

Michigan Farm Bureau President Carl Bednarski said in a statement that the state's and all U.S. farmers welcome the signing.

"Michigan farmers are eager to get back to business in global trade -- restoring our ability to be competitive in China is definitely welcomed news," Bednarski said.

Bednarski added Michigan farmers are ready to put the trade war and retaliatory tariffs in the rearview mirror. "We encourage the Trump administration to continue building on the success of this Phase One agreement and aggressively pursue a full trade agreement with China."

Those purchase requirements, Bednarski said, could be particularly good news for Michigan agriculture.

"China's top five imports from the world, in order, include soybeans, followed by dairy products, fruit, beef and prepared foods," he said.

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