STREAMING NOW: Watch Now

China just agreed to buy $200 billion worth of US products

Article Image

CNN's Christine Romans lists some of the details in phase one of a trade deal between China and the US.

Posted: Jan 16, 2020 7:01 AM
Updated: Jan 16, 2020 7:15 AM


China has agreed to buy hundreds of billions of dollars worth of products from the United States as part of their 'phase one' trade deal.

The agreement signed Wednesday will have Beijing purchase an additional $200 billion of US goods and services over the next two years.

The increase in purchases will be compared to 2017, before the trade war started. China imported over $185 billion in total US goods and services that year.

In exchange, Washington has agreed to reduce tariffs on $120 billion in Chinese products from 15% to 7.5%.

Taken together, the phased purchases by China would result in a dramatic surge in US exports. Total exports to China would increase to over $260 billion in 2020, and roughly $310 billion in 2021 if the deal holds.

'We think it is highly challenging for China to import $200 billion more goods and services from the US over the next two years without reducing imports from elsewhere,' said analysts at UBS.

Agricultural goods account for a big chunk of the new purchases. Under the agreement, China will buy an additional $12.5 billion of those goods in year one, and then $19.5 billion in year two, compared to 2017.

Among the products it has promised to buy are soybeans, pork, cotton and wheat. Trade in soybeans and pork in particular has been hit hard as tensions have escalated between the world's two largest economies.

Both products were among thousands of US goods hit by Chinese tariffs in July 2018, in response to the Trump administration's taxes on $34 billion of Chinese goods.

In addition to the purchases announced on Wednesday, the initial deal provides better protection to American companies that have long complained about thefts of their intellectual property and trade secrets.

It also loosens up requirements for banks wanting to operate in China and imposes anti-counterfeiting measures that, if broken, would lead to penalties.

Beijing's pledges go further than China has in the past, but the agreement doesn't require the government to change any laws or regulations.

And China still didn't give ground on some of the most important issues for America, such as demands for cuts to state subsidies that could trigger a fundamental overhaul of how the Chinese economy works. That is among several sticking points that the two sides are expected to discuss for the next phase of the agreement.

For now, the deal is expected to bring some relief to Chinese manufacturers, who have suffered from tariffs that made their goods more expensive. It also lifts some of the uncertainty that had been clouding companies' decisions to invest in China.

Additionally, the agreement fits neatly into one of Beijing's key goals: to diversify its economy and reform its financial system. China's central bank said in a statement Thursday that the deal would help it continue to open up the country's financial sector.

Going forward, a senior US administration official told reporters that Washington would be 'actively monitoring' data sources from both countries to ensure that China is fulfilling its promise.

— CNN's Donna Borak and Laura He contributed to this report.

Oregon Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 4185

Reported Deaths: 153
CountyConfirmedDeaths
Multnomah114259
Marion94925
Washington73417
Clackamas30611
Deschutes1240
Umatilla1163
Linn1159
Polk9812
Lane693
Yamhill697
Jackson650
Benton555
Clatsop450
Klamath440
Malheur320
Coos310
Jefferson300
Douglas270
Wasco231
Josephine231
Hood River160
Columbia160
Lincoln120
Morrow110
Curry70
Union60
Tillamook60
Crook60
Wallowa20
Lake20
Sherman10
Harney10
Grant10
Baker10
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 109895

Reported Deaths: 4144
CountyConfirmedDeaths
Los Angeles537462339
Riverside7486323
San Diego7385269
Orange6100146
San Bernardino5200204
Alameda328995
Santa Clara2731141
San Francisco253241
Kern214538
San Mateo210484
Tulare184484
Fresno171435
Santa Barbara164912
Imperial163427
Contra Costa142637
Sacramento140056
Ventura107833
San Joaquin85834
Kings7353
Stanislaus69928
Sonoma5484
Solano51722
Monterey50910
Marin45014
Merced2837
San Luis Obispo2691
Placer2149
Santa Cruz2122
Yolo21024
Napa1123
Madera1042
Humboldt993
El Dorado900
San Benito872
Del Norte450
Butte440
Sutter432
Nevada411
Shasta374
Mono351
Mendocino300
Yuba301
Lake210
Inyo201
Mariposa161
Glenn160
Calaveras150
Amador100
Siskiyou70
Colusa50
Lassen50
Tuolumne40
Tehama41
Plumas40
Alpine20
Sierra10
Trinity10
Unassigned00
Medford
Scattered Clouds
71° wxIcon
Hi: 73° Lo: 52°
Feels Like: 71°
Brookings
Clear
67° wxIcon
Hi: 64° Lo: 49°
Feels Like: 67°
Crater Lake
Clear
65° wxIcon
Hi: 67° Lo: 48°
Feels Like: 65°
Grants Pass
Clear
70° wxIcon
Hi: 72° Lo: 49°
Feels Like: 70°
Klamath Falls
Clear
65° wxIcon
Hi: 68° Lo: 48°
Feels Like: 65°
Isolated showers and storms Monday
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events