After nearly 18 months of negotiation, a limited Chinese trade agreement was announced on Friday morning. President Donald Trump confirmed that the first phase of a trade deal with China had been reached via Twitter, which will include “massive purchases” of American agricultural products. The U.S. will be canceling a scheduled increase in tariffs while maintaining a 25 percent tariff on approximately $250 billion of imported Chinese goods. Tariffs will also be reduced to 7.5 percent on another $120 billion of Chinese imports.
“President Trump has focused on concluding a Phase One agreement that achieves meaningful, fully-enforceable structural changes and begins rebalancing the U.S.-China trade relationship,” United States Trade Representative Robert Lighthizer said in a news release. “This unprecedented agreement accomplishes those very significant goals and would not have been possible without the President’s strong leadership.”
The Trump administration is expecting the purchase of approximately $50 billion in American farm products under the deal. President Trump indicated the remaining tariffs will be an important factor for continuing negotiations in the second phase of a Chinese trade agreement. The announcement is being met with significant enthusiasm from the agricultural industry.
“Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet,” said American Farm Bureau Federation President Zippy Duvall. “We encourage the administration to continue building on today’s announced progress and aggressively pursue a full trade agreement with China and other partners around the world.”
The deal will require China to make structural changes to its economic and trade regime in several industrial sectors including agriculture. While no announcement has been made as to when the final text of the agreement will be signed, many agricultural groups are hopeful for the future of the trade relationship between the U.S. and China.
“While we wait to learn more about the details of the agreement, we are optimistic that this positive news will bring long lasting relief to farmers and ranchers who have been targeted with China’s retaliatory tariffs for many months,” said National Cattlemen’s Beef Association CEO Colin Woodall.