According to data released by Chinese customs for the year 2020, Chinese purchases of American products are far from reaching the objectives set in the phase-1 deal.
Source Regional Economic Service of the French Embassy
Increased trade deficit
Imports from the United States increased 10.4% to 135.0 billion USD (while total imports from China fell 1.1%; see news for the week of January 11). Chinese purchases of American products, however, fall well below the increase expected by the phase-1 deal signed between the United States and China on January 15, 2020, which provided for an increase of 200 billion USD in 2020 and 2021 compared to at the pre-trade war level. These commitments, which were akin to the establishment of administered trade contrary to the principles of the World Trade Organization, were already considered unrealistic even before the pandemic severely penalized trade flows.
Chinese commitments
According to the commitments made by China in the agreement, the total increase in Chinese imports of American goods and services (compared to the level of 2017, pre-trade war) was to be 77 billion USD in 2020 and 123 billion USD in 2021, or 200 billion USD of additional imports over two years. Chinese import commitments are broken down in the agreement into 4 major sectoral categories of imports: (i) agriculture: +12.5 billion USD in 2020 (compared to 2017) and +19.5 billion USD in 2021; (ii) manufactured goods: + USD 32.9 billion in 2020 and + USD 44.8 billion in 2021; (iii) energy: + USD 18.5 billion in 2020 and USD +33.9 billion in 2021; (iv) services: + USD 12.8 billion in 2020 and + USD 25.1 billion in 2021.
Biden confirme le deal
Joe Biden announced that he would not go back, at least immediately, on the terms of the agreement signed by his predecessor; a reduction in customs duties is not on the agenda either (between 2017 and 2019, the United States imposed additional customs duties on around 370 billion USD of imports of Chinese goods). Chinese Foreign Minister Wang Yi recently reaffirmed Beijing’s commitment to the phase 1 agreement. Despite the delay in purchasing commitments, the US – China Business Council considers that the agreement remains. success in removing Chinese barriers that prevented the establishment of fair conditions between Chinese and American companies.
To be sure to receive our newsletter FREE every day (Monday to Friday)
Or follow us on Facebook and Instagram
—
