In mid-January, the US and China will sign what is being called a “phase one” trade deal, but fruit exporters shouldn’t expect immediate removal of Chinese tariffs on US fruits that have been in place since 2018.
US president Trump tweeted that the deal with China will be “very large and comprehensive,” and said work on the second phase would begin soon after the initial deal is signed.
The Office of the US Trade Representative said in mid-December that the deal requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.
In addition, the agreement includes a commitment by China that it will make “substantial” additional purchases of US goods and services. The deal, according to the USTR, also establishes a dispute resolution system that ensures prompt and effective implementation and enforcement. The US has agreed to modify its Section 301 tariff actions in a significant way, according to the USTR.
With the phase one deal, media reports indicate China has agreed to buy about $40 billion annually in US agricultural products for the next couple of years.
However, Jim Bair, president and CEO of the US Apple Association, said that White House trade officials have told the association that the phase one trade deal makes no mention of China’s retaliatory tariffs: “It is our strongest hope and expectation that the deal will indirectly result in China’s removal of retaliatory tariffs against US apples,” Bair said in a January 2nd e-mail.
In a Dec. 20 letter to the US Apple Association, President Trump’s chief trade official Robert Lighthizer wrote, “Regarding the unwarranted retaliatory tariffs on US specialty crops, it is up to China to decide how to remove its retaliatory duties to facilitate its purchases and imports of US agricultural products resulting in a more balanced trade relationship.”