Daily Management Review

US To Concede On Tariffs Against China’s Pledge Of $50B Purchase Of US Farm Products


US To Concede On Tariffs Against China’s Pledge Of $50B Purchase Of US Farm Products
China has agreed to make a pledge to procure more of American farm products in 2020 and in exchange the United States under the Trump administration will roll back some tariffs on Chinese goods and scale down the rate if others, said reports quoting sources. Analysts view this as a positive step towards the two largest economies of the world trying to calm down the trade tensions that have been prevailing between them for more than 20 months mow.
US tariffs on $160 billion in Chinese goods slated to go into effect on December 15 would be suspended by the Trump administration while also rolling back some of the existing tariffs, said reports quoting sources who were privy to the happenings of the trade negotiations between the two countries. 
In exchange for that, China would be increasing purchase of US farm and agricultural products in 220 to the tune of $50 billion which is double of what the country had purchased in 2017 prior to the initiation of the trade war, said reports quoting two reports.
However no formal official statement was released by the White House which raised questions about whether both the sides had agreed to the terms.
In an attempt to secure a "phase one" deal first promised in October, US trade negotiators are agreeable to reduce the existing tariff rates on Chinese goods by as much as 50 per cent while also suspending the latest threatened tariffs set to be imposed form December 15, said reports quoting the sources.
Slowing of the global trade and growth and dampening of profits and investments for companies has been the result of the protracted trade war between the US and China. Chinese tariffs on American farm products hit American farmers forcing the Trump administration to announce subsidies for US farmers of a total of $28 billion.
"If signed, this is an encouraging first phase that puts a floor under further deterioration of the bilateral relationship," said US-China Business Council president Craig Allen. "But this is just the beginning. The issues facing the US and China are complex and multi-faceted. They are unlikely to all be resolved quickly."
According to US Department of Agriculture figures, China bought US$24 billion in US farm products in 2017.
The two countries had agreed to a "phase one" trade deal on "intellectual property, financial services" and a "purchase of from US$40 (billion) to US$50 billion worth of agricultural products," Trump said in a White House news conference on Oct 11 with Chinese Vice Premier Liu He.
A written agreement would be available in weeks, Trump said at the time, adding, "we’ve agreed in principle to just about everything I mentioned, all of the different points".
But the positivity of September was subsequently lost as China had reported backed down on the issue of how much of American farm products it would promise to purchase within a specific time frame. The Chinese negotiators demanded that the discretion to make the purchases should depend on market conditions.