China, US reps to speak on phase one deal

BEIJING • Top Chinese and US trade negotiators will speak as soon as next week on progress in implementing their phase one trade deal after President Donald Trump threatened to "terminate" the agreement if Beijing was not adhering to its terms.

Chinese Vice-Premier Liu He will be on the call and the United States will be represented by US Trade Representative Robert Lighthizer, according to people familiar with the matter.

The planned phone call will be the first time that Mr Liu and Mr Lighthizer speak officially about the agreement since it was signed in January, just before the coronavirus pandemic hit the world's two biggest economies and upended global supply chains. The deal called for them to meet every six months, making next week's call slightly ahead of schedule.

Mr Trump seemed to suggest a development was on the horizon when he said on Wednesday that he would be able to report in the next week or two if he is happy with how the trade deal is progressing.

On Sunday, in response to a question at a town hall from a business owner who said he was losing money on tariffs, Mr Trump noted that the duties prompted China to promise to buy billions of dollars worth of US goods. "Now they have to buy. And if they don't buy, we'll terminate the deal, very simple."

According to the agreement signed earlier this year, China has agreed to buy an additional US$200 billion (S$284 billion) in US goods and services over two years compared with 2017's level. The purchases so far have been behind the pace needed to reach the target of the first year's US$76.7 billion increase, as imports from the US declined by 5.9 per cent in the first four months of this year from a year ago due to the pandemic.

Given that last year's imports were less than 2017, the pressure to catch up is mounting.

Beijing plans to show the US that it is sincerely working to fulfil its commitments despite the virus causing delays to some targets, one of the sources said.

For example, some measures that boost enforcement of intellectual property protection need to be approved by the annual National People's Congress, which was postponed from March to later this month.

US-China ties have deteriorated further since America became one of the countries hardest hit by Covid-19. Mr Trump has blamed China for misleading the world about the scale and risk of the virus, and threatened more tariffs as punishment.

China's Foreign Ministry has in turn accused some US officials of trying "to shift their own responsibility for their poor handling of the epidemic to others".

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A version of this article appeared in the print edition of The Straits Times on May 08, 2020, with the headline 'China, US reps to speak on phase one deal'. Print Edition | Subscribe