Money & The Economy

China Fails To Purchase Amount Of US Goods Promised In Phase One Trade Deal, Report Finds

China came $73.1 billion short of the total amount of U.S. goods it promised to purchase in the phase one trade deal between the two nations, according to a Peterson Institute for International Economics report.

While it agreed to purchase $173.1 billion in U.S. goods by the end of 2020, China purchased just $100 billion worth of goods, according to import data analyzed by the Peterson Institute for International Economics (PIIE). In January 2020, former President Donald Trump and Chinese Vice Premier Liu He signed the phase one trade deal, which was aimed at resolving long-running China-U.S. trade disputes, and in February the deal went into effect.

“In the first year of the agreement, China’s purchases of all covered products only reached 58 percent of their target,” the report said.

China fell short of its promised purchases in all sectors including agriculture, manufactured goods and energy, according to PIIE. The Chinese purchased just 39% of the targeted amount of energy products from the U.S. as laid out in the phase one agreement.

Although Beijing fell short of its commitments, it purchased a record $9.9 billion in U.S. goods in the month of September. China’s gross domestic product grew 2.3% in 2020 making it the only major economy not to contract amid the coronavirus pandemic, according to S&P Global.

“We take a momentous step – one that has never been taken before with China – toward a future of fair and reciprocal trade, as we sign phase one of the historic trade deal between the United States and China,” Trump said of the phase one deal in January 2020. “Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers, and families.”

President Joe Biden has said that he doesn’t plan on rolling back Trump’s tariffs and won’t renegotiate the Phase One Trade Deal.

“I’m not going to make any immediate moves, and the same applies to the tariffs,” the president-elect told The New York Times. “I’m not going to prejudice my options.”

It is unclear if the Biden administration’s U.S. Trade Representative (USTR) will pursue a phase two deal with China. USTR didn’t immediately respond to a request for comment.

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