Chinese Vice Premier Liu He and his delegation are expected to travel to the White House to sign the “phase one” trade agreement with the U.S. on Jan. 15. People’s Bank of China Governor Yi Gang and Minister of Commerce Zhong Shan will also be present at the event, according to Bloomberg. Reuters reported that the Trump administration “invited at least 200 people” to the ceremony.
Before the ceremony is set to begin, the Department of Treasury removed its label of China as a currency manipulator. The department released their currency report on Jan. 13 which updates their analysis of China’s currency practices since August, according to the New York Times.
“The report is expected to outline some of the commitments that China has made to improve transparency around its management of the renminbi,” the article reads. “As part of the trade deal that Mr. Trump and Chinese leaders will sign on Wednesday, China and the United States are expected to agree that they will avoid devaluing their currencies to achieve a competitive advantage for their exports.”
Despite White House officials stating last Friday that a Chinese translation hasn’t been made yet, on Fox Business Network, White House economic adviser Larry Kudlow said that the 86-page agreement “is virtually complete.”
“U.S. officials said here in December that Beijing has pledged to buy $200 billion more from the United States over the next two years as part of the deal,” Reuters reported, “including some $40 billion a year in agricultural products. The U.S. will halve tariffs on nearly $160 billion in Chinese goods in return.” Beijing has yet to confirm the numbers.
MEMA has repeatedly called for an agreement between the U.S. and China that will allow U.S. companies to remain competitive in a global marketplace while protecting intellectual property (IP) rights. We were encouraged by the news back in December that the administration reached a “Phase One” trade agreement with China and looks forward to seeing more details. The reduction of tariffs to 7.5 percent on products on list 4A and the cancellation of tariffs on list 4B are an important start, but MEMA encourages the administration to review the 25 percent tariffs still in place on $250 billion of goods. In many cases, these tariffs are causing financial strain on suppliers throughout the U.S.