China to boost imports of US cars, aircraft, energy trade deal: report
14 Jan 2020
China has pledged to buy almost $80 billion of additional manufactured goods from the United States, including cars, aircraft and oil, over the next two years as part of a trade war truce, reports citing sources said.
The US on its part has reversed its decision to brand China a currency manipulator as the two countries prepare to wind down their trade war. The change is agreed to because China had agreed to refrain from devaluing its currency to make its own goods cheaper for foreign buyers.
Washington and Beijing are expected to sign that "phase one" pact on Wednesday.
Under the terms of the trade deal to be signed on Wednesday in Washington, China would also buy over $50 billion more in energy supplies, and boost purchases of US services by about $35 billion over the same two-year period, Reuters cited source as saying on Monday.
The Phase 1 agreement calls for Chinese purchases of US agricultural goods to increase by some $32 billion over two years, or roughly $16 billion a year, said the source, who was briefed on the deal.
When combined with the $24 billion US agricultural export baseline in 2017, the total gets close to the $40 billion annual goal touted by US President Donald Trump.
The actual numbers are expected to be announced on Wednesday at a White House signing ceremony between Trump and Chinese Vice Premier Liu He.
However, the Phase 1 trade deal agreed to by the two countries only provides a rough breakdown of the purchases, without providing specific numbers.
While China must have factored in aircraft purchases already contracted, it is not sure how it will make the numbers for the $80 billion increase in manufactured goods purchases that include autos, auto parts, aircraft, agricultural machinery, medical devices and semiconductors.
There is, however, chances of China increasing purchases of wheat, soybeans, sorghum, dried distillers grains and some corn from the US.