The U.S and China are leaders when it comes to the economy. The U.S. has the largest economy, followed by China. The prolonged trade wat, which dates to 2018, created numerous problems for the economy in respective countries as well as around the world. Hopefully, last week the U.S. and China announced a “Phase one” trade deal.
It is worth mentioning that the global economy is slowing down. In this situation, trade disputes between the largest economies in the world may increase the risk of a global financial crisis. Thanks to this agreement, the U.S. won’t impose additional tariffs on Chinese goods.
This is, without a doubt great news for the economy. However, the statement made by U.S. and Chinese authorities created questions about the trade deal.
There are but important differences between what U.S. and Chinese officials mentioned in their speeches.
The first question relates to U.S. goods. Last week, more precisely on Friday, U.S. Trade Representative Robert Lighthizer commented on this topic. He stated that the deal includes promises by China to but $200 billion more in U.S. products.
According to Lighthizer, during the next two years, China would fulfill this promise. For example, in 2017, China imported products worth $186 billion. It means that China should significantly increase the number of products imported from the U.S.
However, Chinese officials have not confirmed any dollar figure. Based on the information provided by the Chinse officials, China will import more products under the WTO rules.
The vice-chairman of the National Development and Reform Commission Ning Jizhe stated that China could import products from the U.S. Chinese officials underlined the importance of market conditions, not specifics.
The comments made by Ning Jizhe and other Chinese officials show that U.S. and China hade different expectations regarding U.S. imports.
Trade deal and other inconsistencies
On December 13, U.S. President Donald Trump mentioned that China would buy $50 billion in farm products. However, Ning Jizhe provided another viewpoint about agricultural products. According to Ning Jizhe specific among products are not determined and the work is still in progress.
He confirmed that it will increase the procurement of U.S. products. Nevertheless, he did not provide any details.
Another Chinese official, vice-minister of agriculture and rural affairs, Han Jun also made a similar comment. However, he added that the U.S. should import pork and poultry to meet the demands of the domestic market.
There are other inconsistencies as well. For example, Beijing’s statements suggested the U.S. would cancel more tariffs in the future.
Both sides suspended tariffs just two days ahead of December 15 deadline.
Last but not least is the information about the date when the U.S. and China will sign this agreement. U.S. Trade Representative Lighthizer mentioned the first week of January. On Monday, Chinese officials provided a different perspective on the date.
The Foreign Ministry spokesman Geng Shuang stated that both sides should deal with several issues such as translation proofreading etc. Based on Geng, Shuang’s comment is too early to say when the U.S. and China will sign this agreement.