US Treasury Secretary Steven Mnuchin on Sunday said the phase one of the trade deal with China includes them buying USD 200 billion worth of additional products from the US.
“It is USD 200 billion of additional products across the board over the next two years, and, specifically, in agriculture, USD 40 billion to USD 50 billion,” Mnuchin told ABC News, days ahead of the signing of the first phase of the deal.
“This is a big opportunity for our farmers. I think some people have questioned whether they can produce it. The president said they are going to go out and buy more land and produce plenty of agriculture (products),” he said, in response to a question.
Describing it as a historic transaction, Mnuchin said further talks would be held for the remaining phases.
“As we have said, there will be a phase two. But this is the first time we have had a comprehensive agreement with China on technology issues, agricultural issues, financial services, purchases, and has a real enforcement mechanism. So this is a big win for the president,” he asserted.
Mnuchin said that the first phase of the trade deal includes real enforcement provision.
“If they don’t comply with the agreement, the president retains the authority to put on tariffs, both existing tariffs and additional tariffs,” he said.
The language of the trade deal, he said, will be released this week.
“The day of the signing, we will be releasing the English version,” he added.
According to him, there are very important intellectual property rules in the deal that the US expects the Chinese to adhere to.
“There are cyber concerns that we do have. So let me just be clear. Cyber will be part of phase two,” he said.
“But we have incorporated provisions in phase one that we think are important protections for US companies. So, we have made very clear there can be no forced technology transfer and that China is putting out laws to protect both US technology and other technology,” he added.
Trump, who has been accusing China of indulging in unfair trade practices contributing to the huge trade deficit amounting to USD 375 billion, had earlier warned that if a deal is not reached by March 1, the end of the 90-day grace period, the US will increase the tariffs on the USD 200 billions of goods from 10 per cent to 25 per cent.
Trump has been demanding China to drastically reduce the trade deficit and ensure Intellectual property rights production for US technology and services.
The escalating trade war raised concerns in China as its economy was on the downward trend amid efforts by the government to rejig the export-dependent economy to that of relying more on domestic consumption.
Last year, the US imposed tariff hikes of up to 25 per cent on USD 250 billion of Chinese goods. The move prompted China to increase tariffs on USD 110 billion of US goods.
China is currently America’s largest goods trading partner with USD 635.4 billion in total (two way) goods trade during 2017. Goods exports totalled USD 129.9 billion; goods import totalled USD 505.5 billion. The US goods trade deficit with China was USD 375.6 billion in 2017.
Trade in services with China (exports and imports) totalled an estimated USD 75.0 billion in 2017. Services exports were USD 57.6 billion; services imports were USD 17.4 billion. The US services trade surplus with China was USD 40.2 billion in 2017.