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China’s purchase of U.S. exports lags far behind trade agreement pledges

China buys less than three-fifths of US products predicted under a “Phase 1” trade agreement that suspended tariff disputes between the two countries a year ago and joins Joe Biden in relation to Beijing Raised another issue.

Under the terms of the agreement, China has agreed to purchase $ 200 billion in US goods and services in the two years to the end of 2021, rather than 2017, before the start of the trade dispute.

Trade analysts are measuring Beijing’s progress towards that goal, and the latest Chinese import data suggest they are far behind.

Based on data up to the end of last month, Beijing bought only 58 percent of US exports expected under that forecast, according to an analysis by the Peterson Institute for International Economics.

According to the institute, China’s imports of US products subject to trade agreement purchase commitments reached $ 100 billion by the end of December, compared to the prorated target of $ 173.1 billion.

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The shortage presents challenges to the Biden administration to determine how much of the Trump administration’s policy towards China, including whether to maintain U.S. tariffs on billions of dollars imported from China. I will.

The deal is “always a political agreement,” and the Biden team should “do not emphasize the promise of purchase,” said Chad Baun, a fellow at the Peterson Institute for International Economics.

“You want to reward your actions, and at the same time you’re trying to say, we don’t necessarily encourage the Chinese state to make all these purchases —” No, it’s more market-oriented. ” Bown said.

“It’s very unfair to behave like Covid,” U.S. Trade Representative Robert Lighthizer told the Financial Times last week when it comes to analyzing China’s fulfillment of its purchasing commitments. Stated.

Lighthizer, who oversaw US trade negotiations with Chinese officials as Donald Trump’s chief trade official, said Phase 1 deals consisted more than promised purchases. He claimed that there were “too many changes” that China made to intellectual property protection. A new and clear rule that Beijing cannot force a technology transfer from a US company to a Chinese company. And the opening of some of the country’s financial services.

A $ 1 billion bar chart showing that China's purchase of US products is below its

The agreement sets goals for a wide range of sectors, from aircraft to medical devices, soybeans to seafood, and services such as tourism and cloud computing.

Regarding purchase commitments in 2020, exports by sector were stronger than others. China has come closest to fulfilling agricultural purchases and has made the worst promises to buy energy.

China purchased $ 23.5 billion in agricultural products covered by this transaction, with an estimate of $ 36.6 billion in the first year.

Imports of US energy products covered by the agreement from China were only $ 9.8 billion, against the implied annual target of $ 25.3 billion. The collapse of oil and other energy prices during the pandemic has made it almost impossible to reach the dollar target for trading.

However, the slump in crude oil prices has caused a surge in crude oil imports in recent months as China stockpiled supplies and prices fell.

Crude oil imports from the U.S. averaged about 1 million barrels a day from May to September, about three times the same period last year, according to U.S. government data, but analysts said China as prices recovered. Is wondering if they will continue to buy at this pace.

The first phase of the trade agreement did not address some of the biggest causes of tension between the two countries, such as commercial cyber theft in China and the use of industrial subsidies in Beijing.

However, as US-China relations worsened, Phase 2 negotiations did not take place under the Trump administration.

Mr Biden said he would work with Europe to put more pressure on Beijing on trade issues and end the Trump administration’s sole negotiation strategy, his next official said so far. Is considered a top priority.

In a maiden speech earlier this month, the upcoming US Trade Representative, Katherine Tai, said “growing and ambitious competition with China” would be one of the most important issues in her trade outline. The next Treasury Secretary, Janet Yellen, also told Congress this week that the administration would consider swiftly addressing economic fraud from China.

China’s purchase of U.S. exports lags far behind trade agreement pledges

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