U.S.-China Trade Deal Positive and Negative for U.S. Agriculture

U.S.-China Trade Deal Positive and Negative for U.S. Agriculture

President Donald Trump and Chinese Vice Premier Liu He signed phase one of a trade deal Wednesday.

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January 16, 2020

NBC News – President Donald Trump and Chinese Vice Premier Liu He signed phase one of a trade deal Wednesday, capping an 18-month battle. The $200 billion trade deal includes "an average" of $40 billion a year for the next two years in agricultural purchase targets from the Chinese; a pledge to purchase $77.8 billion more in U.S. manufactured goods, such as cars, aircraft and farm machinery; $52.4 billion in U.S. oil and gas purchases; $37.9 billion in financial and other services; and increased protections for U.S. intellectual property.

The Dow Jones Industrial Average rose by almost 200 points at midday Wednesday to breach the 29,000 mark again, and all three major indices hit record highs. However, some economists saying that after almost two years of posturing, the actual commitments eked out in the deal do not go far enough.

While the U.S. delegation was able to extract certain commitments from China, such as access to its financial sector and criminal penalties for intellectual property theft, the phase one deal does not fundamentally alter China's economic business model, does not address or change China's state subsidy of the agricultural sector — leaving U.S. farmers to wonder what they have gained after months of punishing tariffs.

Source: NBC News