Under the phase-one deal conditions, China agreed to buy an additional $200 billion of United States goods over the next two years.
On top of 2017, United States export numbers will come the additional purchases.
The deal stipulates that Beijing will meet the total $200 billion. Thus, they will buy $77 billion of additional services and goods in 2020. And they plan to buy $123 billion of United States goods and services in 2021. In 2017 China bought $186 billion of United States goods and services.
The phase one deal has other agreements also. In 2020 U.S. exports to China should climb in theory to $123 billion. In 2021 United States exports to China need to rise to $309 billion. For U.S. exports to China, the amount will mark a record-breaking acceleration.
Wednesday afternoon at the White House, the two nations signed the phase-one trade agreement. Between the two largest economies of the world, it was one of the most protracted trade battles in modern American history. The two countries for the better part of the two years slapped tariffs of billions of dollars’ worth of each other’s goods.
Thus, the phase-one agreement is seen as a sort of truce. It includes concessions by the Chinese to stop intellectual property theft. Moreover, the Chinese side will transfer American technologies. Nevertheless, it provides import targets for Beijing. The two teams work towards a permanent bilateral agreement. Thus, China promised to buy a host of American products.
The composition of the additional $200 billion is the following:
- In 2020 $12.8 billion, In 2021 $25.1 billion – SERVICES.
- $18.5 billion in 2020, In 2021, $25.1 billion – ENERGY GOODS.
- In 2020 $12.5 billion, in 2021 $19.5 billion – AGRICULTURAL GOODS.
- $32,9 billion in 2020, in 2021, $44.8 billion – MANUFACTURED GOODS.
What will China buy from the United States?
The manufactured goods include iron and steel products, antibiotics, human blood for therapies, insulated wire, radar parts, electrical lighting, hair clippers, refrigerators, nuclear reactors, and Steam Turbines.
Energy includes calcined and uncalcined petrol, coke, Liquified and butane and propane, coal, methanol, petroleum oil, and liquified natural gas.
The Services include charges for the use of IP, cloud computing services, data hosting, telecom services, management consulting, insurance, reinsurance, financial services, and education-related travel.
The Agricultural goods include honey, horses, cotton, flour, corn, fruit, jams and jellies, wheat, swine and bovine meat, and soybeans.
As you see, there are a lot of things China will purchase from the United States.
More details, such as the exact value of specific purchases, for example, pork or soybeans, could not be ascertained. Nevertheless, the trade talks are on a unique path, say the experts.
The United States President Donald Trump said that China is righting the mistakes of the past. The country will deliver a future of security and economic justice for American farmers, families, and workers. The president added that the deal has full and total enforceability.
The trade deal is good for China, and for the United States says the Chinese leader. He adds that the transaction is good for the whole world as well.
Some people agree that the deal is favorable for global economic growth. Others think that it won’t have a significant impact, and there won’t be any significant changes.