August 27, 2020
US and China reaffirmed Phase 1 trade deal commitment through phone call
Trade officials from the United States and China reasserted their commitments outlined in both countries Phase 1 agreement signed earlier this year, even as China has far from fulfilling its pledge to buy more US agricultural goods, Reuters reported.
The phone call on August 25 involved Robert Lighthizer, US Trade Representative; Steven Mnuchin, US Treasury Secretary; and Liu He, China's Vice Premier and is their first communication since early-May.
The US Trade Representative's office (USTR) said both parties see progress and are committed to ensuring the success of the agreement. China's commerce ministry said there was constructive dialogue between both parties and China will commit to the Phase 1 trade deal.
China had recently purchased more US soybeans and other agricultural products but remains far from its pledge to buy US$36.5 billion worth of US farm goods.
The US Census Bureau said China had imported US$7.274 billion of US agricultural goods between January to June this year.
There has also been concerns over the Phase 1 trade deal as political ties have been strained as both countries enforce sanctions and barbs on each other over several issues. These include China's disputed South China Sea territorial claims, the Hong Kong national security law, COVID-19 and alleged national security threats from China's tech companies.
The USTR said in addition to talks over increased US goods purchases by China, other discussions include China's steps to protect intellectual property rights, eliminating obstacles for US companies in the agriculture and financial industries as well as remove forced technology transfers.
Global stocks and Asian currencies went up over news of the Phase 1 call.
An agricultural goods trader from a China state-owned company said China will buy more US farm goods but is unsure if the target can be achieved. The person is unathorised to speak to the media.
Ole Houe, IKON Commodities Sydney director of advisory services, an agriculture brokerage said the discussions could push demand for US commodities higher.