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U.S., China tiptoe around holes in trade deal

Credit: Reuters - Politics
Published on January 16, 2020 - Duration: 02:11s

U.S., China tiptoe around holes in trade deal

The United States and China signed an initial trade deal on Wednesday that will roll back some tariffs and boost Chinese purchases of U.S. products, defusing an 18-month row between the world's two largest economies but leaving a number of sore spots unresolved.

Libby Hogan reports.

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U.S., China tiptoe around holes in trade deal

The United States finally signed the first part of a trade deal with China.

U.S. President Donald Trump painted it as a win on Wednesday (January 16).

(SOUNDBITE) (ENGLISH) U.S. PRESIDENT DONALD TRUMP, SAYING: "We mark a sea change in international trade, at long last America has a government that puts them first." But analysts are skeptical.

They point out there's a lot Trump didn't mention after the signing ceremony.

Under the agreement China is on the hook to buy massive amounts of U.S. exports.

They're meant to purchase an additional $200 billion dollars worth of U.S. agriculture, energy and services over two years.

And in return the U.S. will drop some of its trade-war tariffs.

But under this deal, Beijing only agreed to buy all that quote - 'based on market conditions.'

That's what China's vice premier Liu He said with Trump at his side.

UPSOT of LIU yesterday After He spoke - the price of soybeans fell- one of the top products sent to China before the trade war.

It's a sign of doubt among farmers and traders of the deal.

There's questions over whether Beijing will buy this much oil, coal, and gas too.

Even in record months, China bought less than half the energy the deal asks for.

Meanwhile Democrat Senator Chuck Schumer says phase 1 doesn't go far enough - tackling practices like China flooding the markets with low priced goods.

(SOUNDBITE) (ENGLISH) U.S. SENATOR CHUCK SCHUMER, SAYING: "This so-called deal does next to nothing of substance for workers and businesses feeling the brutal and merciless weight of China's trade and industrial abuse.

I greatly fear that President Xi is laughing at us behind our backs for having given away so little." Market turmoil tied to the trade war last year left the global economy growing at its lowest rate since the financial crisis.

And the deal still leaves tariffs on a wide swath of goods from both sides.

Tariffs on Chinese imports have cost U.S. companies 46 billion dollars.

Trump said Wednesday once Phase 2 is done, the tariffs will be peeled away.

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