The deal includes a Chinese commitment to purchase more American ag products
By Diego Flammini
U.S. President Donald Trump and Chinese Vice Premier Liu He put pen to paper on a phase one trade agreement Wednesday in Washington, D.C.
“Together we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families,” President Trump said during the signing ceremony.
The signing of the trade agreement, which takes effect after 30 days, comes after an almost two-year trade war that affected multiple sectors including agriculture.
And just as the trade war hurt the ag sector, this agreement between China and the U.S. is set to benefit American farmers.
Part of the trade deal includes a Chinese commitment to purchase more American farm products.
In year one of the agreement, China will purchase US$12.5 billion of additional ag goods on top of the 2017 baseline amount of US$23.8 billion that year, the trade agreement says.
In year two, China has agreed to import US$19.5 billion of U.S. ag in addition to the 2017 baseline amount. Those figures add up to US$32 billion of additional U.S. ag imports to China and US$55.8 billion of American ag imports to China overall.
U.S. farm groups celebrated Wednesday’s signing.
China was America’s largest ag customer prior to the trade war. Farm groups are optimistic this trade deal can help China become the top destination for U.S. ag again.
“China was once the largest market for U.S. agricultural products but has dropped to fifth largest since retaliatory tariffs were introduced,” Zippy Duvall, president of the American Farm Bureau Federation, said in a statement Wednesday. “This agreement will help turn around two years of declining agricultural exports. The potential of tens of billions more in exports is welcome news for farmers who are eager to compete on a more level playing field.”
America’s secretary of agriculture is also excited about what this deal means for U.S. farmers.
This agreement finally levels the playing field for U.S. agriculture and will be a bonanza for America’s farmers, ranchers, and producers,” Sonny Perdue said in a statement on Wednesday.
More negotiations between the U.S. and China will take place in the future as the two sides work on a second phase of this agreement, President Trump said.
The signing takes place around the 1:12:00 mark of the video.