Tomorrow's US-China Phase One Trade Deal Signing... "Items for Additional Tariff Cuts Seem Excluded"

[Image source=Yonhap News]

[Asia Economy Beijing=Correspondent Park Sun-mi] The United States and China will hold the final signing ceremony for the Phase One trade agreement at the White House on the 15th (local time). Although the first step toward resolving the conflict will be taken, it is expected that the U.S. will maintain existing tariffs on China at least until the November election, indicating that there is still a long way to go before a complete resolution of the conflict.

On the 14th (local time), Bloomberg News, citing sources, reported that even if the signing ceremony for the U.S.-China Phase One agreement proceeds, the U.S. will not further reduce the additional tariffs imposed on China before the U.S. presidential election on November 3. The U.S. will, as previously promised, suspend tariffs on about $160 billion worth of Chinese imports and reduce tariffs on $120 billion worth from 15% to 7.5%, but the 25% tariffs on $250 billion worth of goods are likely to remain unchanged for at least 10 months until the U.S. election.

It added that how well China implements the provisions specified in the Phase One trade agreement will influence future tariff reductions. Economic media CNBC also reported, citing U.S. officials, that U.S. tariffs on China are likely to be maintained during the 2020 election period.

Among senior U.S. officials, there are also rumors that the Phase One agreement does not include any provisions for additional tariff reductions. Treasury Secretary Steven Mnuchin and U.S. Trade Representative (USTR) Robert Lighthizer stated in a joint statement that "there was no agreement on additional tariff reductions" and that "any rumors to the contrary are false."

U.S. media analyzed that President Donald Trump intends to take time to verify whether China properly implements the Phase One trade agreement. Through the signing ceremony, the U.S. aims to avoid escalating conflicts further while using the existing 'tariff barriers' as leverage to enforce China's compliance with the agreement.

The U.S.-China trade negotiation agreement to be signed by both countries on the 15th is reportedly 86 pages long and consists of nine sections: preface, intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rates and transparency, trade expansion, mutual evaluation and dispute resolution, and final provisions.

The core content is that China has agreed to purchase $200 billion (231.7 trillion KRW) worth of U.S. products over the next two years in four categories. Earlier, Hong Kong's South China Morning Post (SCMP) reported that the purchase targets for the $200 billion worth of U.S. goods China will buy are set as $75 billion in manufactured goods, $50 billion in energy, $40 billion in agricultural products, and $35-40 billion in services.

On the 13th, the U.S. Treasury Department took a conciliatory gesture by removing China from the currency manipulator designation and classifying it as a monitoring country, stating that China promised to refrain from competitive currency devaluation and to disclose related information under the Phase One trade agreement.

Chinese media have welcomed the Phase One U.S.-China trade agreement but also expressed that since it is not a complete resolution of the U.S.-China conflict, there is still a long way to go before the issues are fully resolved.

The Chinese Global Times, in an editorial on the day, evaluated that "the U.S. removal of the currency manipulator designation on China is clearly part of the Phase One trade agreement," and said, "Both countries are trying to return trade relations to a normal track. This is a welcome development." However, it also pointed out that "the Phase One signing is not the entirety of U.S.-China relations but only the first agreement concluded," and that "there are still many issues to be resolved between the U.S. and China, such as Hong Kong and Taiwan."

Chinese economic media Caixin, through an editorial by Editor-in-Chief Lu Zhengfa, assessed that in this Phase One agreement, the U.S. did not get the answers it wanted from China on fundamental issues such as reform of Chinese state-owned enterprises and government subsidies, so these issues are likely to be fiercely discussed in the upcoming Phase Two and Three negotiations. It also explained that implementing the Phase One agreement may be difficult for both sides and that this Phase One agreement will not have a significant impact on resolving the bilateral conflict.

This content was produced with the assistance of AI translation services.