Better conditions needed for phase one deal
There are rising calls in China for US to further remove higher tariffs on Chinese products, as part of efforts to create better conditions for both sides to implement the phase one trade agreement. US officials have reportedly rejected requests from US businesses for tariff exemptions on Chinese supplies.
In what appears to be an implicit message to the US government, Chinese Vice-Premier Liu He, who heads the Chinese side in trade negotiations with the US, hinted in remarks to an influential financial forum in Shanghai on Thursday that both sides should do more to carry out the deal.
“Conditions and an environment should be created, and disturbances should be eliminated to jointly implement the China-US phase one trade agreement,” Liu said, which mostly focused on domestic policies and reform and opening-up plans.
In Washington, US Trade Representative (USTR) Robert Lighthizer defended the phase one deal on Wednesday, saying that China was still carrying out the trade agreement despite the COVID-19 pandemic.
“Every indication is that in spite of this COVID-19, they are going to do what they say,” he told US lawmakers, adding that China has purchased $10 billion worth of US agricultural products.
Despite escalating tensions between the two countries over a series of issues from the COVID-19 pandemic to China’s internal affairs in Hong Kong, Xinjiang and Taiwan, China continues to implement the deal. China’s efforts were behind a 43 percent surge in trade volume between the two countries in April, which lifted China to be the US’ biggest trading partner, overtaking Canada and Mexico, analysts said.
But despite China’s efforts, US officials appear to be lagging on concrete moves to help carry out the deal. According to recent media reports, the USTR has rejected 66 percent of the nearly 53,000 requests from American businesses asking for tariff exemptions.
The US has maintained tariffs on about $360 billion worth of Chinese imports, despite its pledge to remove the tariffs gradually as part of the phase one deal.
“Trade should be fair and reciprocal. China has been buying more US products. Why can’t the US buy more Chinese products? It is time for the US to remove trade barriers and tariffs,” He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times Thursday.
Li Yong, deputy chairman of the Expert Committee of the China Association of International Trade, said that China is still implementing the trade agreement as planned but “better conditions must be created” by the US.
“The US must recognize China’s efforts and do its part to help the process,” Li told the Global Times on Thursday.
However, the US has not changed its pressure tactics, even as it hopes for China to continue purchasing US products, analysts noted.
Regarding US President Donald Trump’s signing into law a bill on China’s Xinjiang on the same day as Chinese State Councilor Yang Jiechi met with US Secretary of State Mike Pompeo in Hawaii to exchange views on many issues of dispute, He Weiwen said that “the US keeps pressuring China…and it hasn’t changed its tactic yet.”
Such a tactic could pose hurdles for continuing cooperation in carrying out the phase one agreement and any future trade negotiations such as a phase two deal, analysts said.
“China still hopes to reach a trade agreement acceptable to both sides, but that certainly requires a better [political and diplomatic] environment,” Li said.
A ship unloads soybeans from Brazil at a terminal in Lianyungang port, East China’s Jiangsu Province. The 80,000 tons of soybeans left Brazil in March, and they will mainly be used to make edible oil and soybean meal feed. Photo: cnsphoto
