Chinese officials delivered a clinic in obfuscation on Friday, in the course of sketching the contours of an interim trade agreement with the Trump White House.
There were no details provided on the amount of farm products China will purchase, and officials generally declined to say anything about what Beijing had committed to other than to regurgitate talking points everyone has heard previously.
It was clear that Donald Trump wanted more. It was equally clear he realized the potential for China’s press conference to underwhelm markets. Although the two sides agreed not to impose further tariffs on December 15, traders learned nothing definitive about what tariffs would be rolled back or when, despite Chinese officials insisting that the US side had committed to lifting some of the levies.
In a largely hapless effort to spin the situation, Trump took to Twitter.
“We have agreed to a very large Phase One Deal with China”, he said, before delivering a word salad replete with nebulous superlatives. “They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more”.
As usual, there are no specifics – just what you would find in the thesaurus if you looked up synonyms for “big” and “greater than”.
“The 25% Tariffs will remain as is”, Trump continued, on the way to saying that “7 1/2%” will be “put on much of the remainder”. It wasn’t immediately clear what that meant, although it sounds like the 15% levies imposed on September 1 will be cut in half.
That was subsequently confirmed by the USTR. “The United States will be maintaining 25 % tariffs on approximately $250 billion of Chinese imports, along with 7.5 % tariffs on approximately $120 billion of Chinese imports”, a statement reads.
The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!
China, meanwhile, continued to demur when pressed for details on this “amazing deal for all”.
Officials in Beijing steadfastly refused to give any specifics on boosting farm purchases from the US, saying only that the details and a “follow-up date” will be worked out later.
Oh, and they also said the US will increase tariff exemptions and barriers to imports on Chinese agricultural goods, including and especially catfish.
Apparently that’s the “art of the deal” – the US cuts the latest round of tariffs in half, and in return, China agrees to sell America more catfish.
Full USTR statement
The United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement. The United States has agreed to modify its Section 301 tariff actions in a significant way.
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. This unprecedented agreement accomplishes those very significant goals and would not have been possible without the President’s strong leadership.
Today’s announcement of a Phase One agreement with China is another significant step forward in advancing President Trump’s economic agenda. Thanks to the President’s leadership, this landmark agreement marks critical progress toward a more balanced trade relationship and a more level playing field for American workers and companies,” said Secretary of the Treasury Steven Mnuchin.
The United States first imposed tariffs on imports from China based on the findings of the Section 301 investigation on China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports.