Multiple reports have indicated that officials from the United States and China will be meeting soon to review the phase one trade agreement’s progress. The terms of the trade deal were established last December, well before both countries’ economies were significantly impacted by the COVID-19 pandemic. Plans for a meeting between U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He were first reported by the Wall Street Journal. The representatives are scheduled to meet virtually on August 15 to discuss concerns about the success of the deal.
The terms of the agreement included China’s commitment to increase the total purchase of American goods by $200 billion over 2017 levels. The increased Chinese imports were to include agricultural and manufactured products, along with energy and other services. Six months into 2020, China has so far only purchased a small percentage of the agreed-upon energy products under the agreement. Agricultural products have also been well below the pace of what would be needed to meet the threshold of the phase one trade agreement.
Trade numbers from the U.S. Department of Agriculture (USDA) indicate that China is significantly behind schedule in keeping up with purchase commitments. In its latest report, USDA’s Foreign Agricultural Service shows that between January and June the U.S. has exported less than $7 billion in agricultural goods excluding forestry products. Per the agreement, China will need to reach $36.5 billion in agriculture purchases this year and $43.5 billion next year.
The trade numbers do not include the latest Chinese commitments for U.S. sorghum, corn, and soybeans. The first week of August saw private exporters selling more than 300,000 metric tons of soybeans to China. There was also a record-setting daily flash sale of corn to China at the end of July. While the latest purchases appear to be a step towards meeting the terms of the phase one trade agreement, there are still concerns as to whether China will be able to pick up the pace by the end of the year.
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