China didn’t buy agreed quantities of US items beneath the Part One Commerce Settlement: Dates

SINGAPORE – China has so far failed to meet its purchase commitments for US goods under the Phase 1 trade agreement it signed with the Trump administration.

Under the “Phase 1” trade agreement, China agreed to purchase at least $ 200 billion more in US goods and services over a period of two years – 2020 and 2021 – on top of its 2017 purchases. The deal was signed last January, pausing a damaging US-China wage war that began in 2018.

In its first year of implementation, China imported $ 100 billion of the U.S. goods agreed under the deal – around 58% of the targeted $ 173.1 billion for 2020, according to the Chinese compiled by the Peterson Institute for International Economics Customs data.

Although they refer to the same thing, statistics on Chinese imports from the United States often do not reflect those of US exports to China, partly due to different data collection methods and standards in the two countries.

PIIE does not track Chinese purchases of US services made under the contract as the data is not reported on a monthly basis.

Even before the pandemic, several experts had stated that it was not realistic for China to increase the purchase of US goods by this amount. The Covid-19 outbreak made this commitment even more difficult to meet as Chinese import demand fell.

In addition to the purchase of goods and services, the “phase one” deal also contained extensive provisions for China to strengthen intellectual property protection and open up its markets to financial services companies.

Robert Lighthizer, Trump’s former US trade agent involved in negotiations with China, reportedly said last month that Beijing had “done reasonably well” in implementing parts of the deal. Lighthizer added that the Biden government should stick to the trade deal and use tariffs as leverage, Reuters reported.

President Joe Biden, sworn in on Wednesday, made no official announcements about the fate of the “first phase” trade deal. He said last month that he would not immediately reset tariffs on China and conduct a full review of the deal.

Some public order experts pointed out that members of the Biden team agree with the Trump administration on many China issues. That means a tough stance on Beijing would continue, but with a different approach, experts said.

“The main reason we are changing direction is that the Trump administration’s approach has failed,” said Scott Kennedy, senior advisor and trustee chair for Chinese economics at the Think Tank Center for Strategic and International Studies.

Kennedy wrote in a report on Tuesday, prior to Biden’s inauguration, that former President Donald Trump and his team “deserve credit for ringing alarm bells about the dangers of a Xi Jinping-led China.”

The previous administration, however, had not addressed many economic problems “with effective policies that changed the facts in America’s favor,” he added. In particular, Kennedy said the “first phase” trade deal left China’s supply of industrial policy instruments “completely intact,” Kennedy said.

“Equally problematic was the culmination of the deal, the $ 200 billion purchase agreement, a disaster: it advocated managed trade and Chinese state interventionism, while setting unrealistic goals that China had never come close to predicting,” he wrote.