China’s deficit in purchases of US goods under the first phase trade agreement

SINGAPORE – Almost a year after the US-China “Phase 1” trade agreement was signed, Beijing is still a long way from fulfilling its promised purchases of American goods, data from the Peterson Institute for International Economics showed.

The “first phase” trade deal signed in January interrupted a wage dispute between the world’s two largest economies that began in 2018. At the heart of the deal is China’s commitment to buy at least $ 200 billion more in U.S. goods and services over two years in 2020 and 2021 – in addition to purchases made in 2017.

Several experts said it was not realistic for China to buy so much more additional US goods. Fulfilling this commitment has become even more difficult as the Covid-19 pandemic caused Chinese import demand to decline.

Referencing the latest US trade dataPIIE said Wednesday that between January and November this year, China bought $ 82 billion worth of U.S. goods – just more than half of its target of $ 159 billion for all of 2020.

Broken down by product type, the data showed that China’s purchases of all product categories in the eleven months fell well short of its agreed full-year commitment, the Washington, DC-based think tank said.

China has made the least progress in purchasing US energy products while getting the closest to the target amount of agricultural goods, the data showed.

PIIE does not track China’s purchases of US services made under the contract as this data is not reported monthly.

Relations between the US and China have deteriorated under President Donald Trump. The trade war resulted in increased tariffs on billions of dollars’ worth of goods. The two countries also quarreled over technology. The origin of Covid-19 and China is the passage of a new national security law in Hong Kong.

President-elect Joe Biden, who will take office next month, has said he will not immediately lift tariffs imposed on China by the Trump administration. He would like to begin a full review of the “first phase” trade deal and consult with US allies to develop a “coherent strategy” for China.