US and China poised to sign 'Phase One' of trade deal
This signing would be the first step in reducing mutual tariffs and calming economic and trade tensions
US Treasury Secretary Steven Mnuchin said on Wednesday that some technology and cybersecurity issues will be resolved in the next chapter of a deal to end the trade war between the United States and China. The comments came as the US prepares to ink the first part of a new multi-part trade deal with China, something US officials have desired.
As part of the 'Phase One' agreement, China said it would tighten intellectual property rules, increase agricultural purchases and open up its financial sector.
In return, the Trump administration agreed to cut a 15 per cent tariff rate in half for $110 billion worth of products targeted in September and delay planned escalations. The tariff rates of other tranches, with a total trade value of roughly $250 billion, will remain the same as an enforceable mechanism.
Additional rollbacks of tariffs in 'Phase Two' will arrive as tech and cybersecurity issues are worked through. Mr Mnuchin seemed confident that China would implement an mold laws to follow through on its commitments.
Speaking about the trade deal, Secretary Mnuchin said "I think a very significant amount of the technology issues are in Phase One. There are other certain areas of services away from financial services that will be in Phase Two. There are certain additional cybersecurity issues that will be in Phase Two." The treasury secretary thought "there [are] still more issues to deal with and we'll address those" but warned the US can hike tariffs if China isn't meeting trade deal agreement.
There still [are] more issues to deal with and we'll address those
The only component of the agreement that won't be made public is a confidential annex with specific purchase amounts, they said, because it could influence market behavior.
Trade negotiators had planned to begin efforts de-escalate economic tensions after the first stage is signed, but President Trump has said he may wait until after the presidential election to finalize Phase Two, which could address thornier issues such as the large-scale subsidies China offers its companies.
Speaking jointly Mr Mnuchin and US Trade Representative Robert Lighthizer said that "There are no other oral or written agreements between the United States and China on these matters, and there is no agreement for future reduction in tariffs," indicating that this deal was tentative and could be pulled back from by the US side if they deem China isn't sticking to their side of the deal.
Updated: January 15, 2020 06:14 PM