On January 15, 2020, the U.S. and China signed the first phase of the trade agreement, a temporary ceasefire in the trade war.
January 15 marks the one-year anniversary of the signing of the first phase of the U.S.-China trade agreement. What exactly has the Chinese Communist Party delivered on its promises in the agreement over the past year?
On Jan. 15, 2020, the U.S. and China signed the first phase of the trade agreement in Washington. Under the agreement, Washington agreed to partially cut tariff increases, while the Chinese Communist Party increased its purchases of U.S. goods and services by $200 billion over two years from 2017 trade levels. The agreement also requires China to reduce trade barriers.
A year after the agreement was reached, the Chinese Communist Party has failed to meet its expected purchase targets, while the U.S. trade deficit with China has only grown.
The Voice of America wrote an article on Jan. 16 taking stock of how well the Chinese Communist Party has delivered on the trade deal in the year since.
Under the agreement, the CCP agreed to buy about $159 billion in U.S. goods by the end of last year. But the Peterson Institute for International Economics reported that China’s actual purchases were about $82 billion as of last November, about 52 percent of the target.
The report showed that China reached 67 percent of its target in purchases of agricultural products, 52 percent in manufacturing and only 31 percent in energy.
And after the Peterson Institute for International Economics calculated last Oct. 26 that the CPC’s U.S. goods purchases as of Sept. 30 were $58.8 billion, less than half the amount committed, based on data released by the U.S. Department of Commerce on Oct. 26, the Peterson Institute for International Economics asserted at the time that the CPC was unlikely to meet the amount of purchases it had committed to for the year.
Some economists attributed the shortfall in part to the Communist Party’s viral plague, which weakened China’s domestic demand for foreign goods and lowered the price of imported energy products. But many experts have argued from the start of the agreement between the two sides that the Chinese Communist Party is unlikely to deliver on its promises.
David Dollar, an expert on China’s economy at the Brookings Institution, a think tank, believed from the start that the Communist Party would not be able to meet its procurement targets. He said, “At the heart of the first phase of the agreement was China’s agreement to import more products from the U.S. This government-to-government agreement is not how trade works, and it turned out to be a failure.”
Commentator Wen Xiaogang, on the other hand, believes that it is possible for the CCP to fulfill its full-year procurement commitment if it wants to, and that this year, the mainland has seen soaring pork prices, a lack of soybeans, rising corn prices, and the Yangtze River basin has also experienced a major flood that caused a significant reduction in summer grain production, so if the CCP imports a large amount of these foods, it can lower the prices of these commodities on the mainland on the one hand, and fulfill its procurement commitment from the United States on the other. However, in order to show the outside world that it will not bow down to the United States, the Chinese Communist Party just does not increase imports, resulting in soaring prices of these commodities on the mainland and breaking its promise.
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