WEST PALM BEACH (Florida) • The first phase of a US-China trade agreement will be inked at the White House in the middle of this month, US President Donald Trump has announced, adding that he will visit Beijing at a later date to open another round of talks aimed at resolving other sticking points in the relationship.
The so-called "phase one" agreement is smaller than the comprehensive deal Mr Trump had hoped for and leaves many of the thorniest issues between the two countries for future talks. The two sides have yet to release detailed documentation of the pact, making it difficult to evaluate.
Mr Trump said on Tuesday that high-level Chinese government officials will attend the signing on Jan 15 of "our very large and comprehensive phase one trade deal with China".
"At a later date I will be going to Beijing where talks will begin on Phase Two!" he tweeted. He did not announce a date for the visit.
China has agreed to boost its US goods imports by US$200 billion (S$270 billion) over two years, the US Trade Representative said on Dec 13 when the deal was announced. That includes increased purchases of soya beans and other farm goods that would reach US$40 billion a year.
Beijing has also agreed to stop forcing US companies to hand over technology and trade secrets as a condition for gaining access to China's vast market, demands that had frustrated many US businesses.
In return, the Trump administration dropped plans to impose tariffs on US$160 billion worth of Chinese goods, including many consumer items such as smartphones, toys and clothes. The US also cut tariffs on another US$112 billion of Chinese goods from 15 per cent to 7.5 per cent.
Many analysts argue that the results are fairly limited, given the costs of the administration's 17-month trade war against China. US farm exports to China fell in 2018 to about one-third of the peak reached six years earlier, though they have since started to recover.
Import taxes remain on about half of what the US buys from China, or about US$250 billion worth of imports. Those tariffs have raised the cost of chemicals, electrical components and other inputs for US companies. American firms have cut back on investment in machinery and other equipment, slowing the economy's growth last year.
A study last week by economists at the Federal Reserve found that all of the Trump administration's tariffs, including those on steel and aluminium as well as on Chinese imports, have cost manufacturers jobs and raised their costs. That was mostly because of retaliatory tariffs imposed by China and other trading partners.
Many experts in both the US and China are sceptical that US farm exports can reach US$40 billion. The most the US has ever exported to China before has been US$26 billion. China has not confirmed the US$40 billion figure.
Still, the agreement has helped calm concerns in financial markets.
Since the US-China pact was first announced in October, the stock market has risen steadily. Most analysts now forecast that the economy will grow at a steady if modest pace this year, extending the current record-long expansion.
The phase one deal has left some major issues unresolved, notably complaints that Beijing unfairly subsidises its state companies to give them a competitive advantage in world markets.
The Trump administration argues - and independent analysts agree - that China uses the subsidies to gain an advantage in cutting-edge fields such as driverless cars, robotics and artificial intelligence.
Another sticking point in future talks will likely involve rules around data flows, with China looking to require more foreign companies to keep data they use in China as opposed to stored overseas.
"It's a very toxic brew and I don't know that we're really going to see much progress on it," said trade economist Mary Lovely at the Peterson Institute for International Economics.