For U.S. export data and Chinese import data, the first phase targets for additional trade for 2020 (in addition to the 2017 base year) are $12.5 billion (agriculture), $32.9 billion (industrial goods) and $18.5 billion (energy). These objectives are set out in Annex 6.1 of the Agreement. 7. See U.S. Trade Representative and U.S. Department of Agriculture, Progress Report on the United States of America-People`s Republic of China Economic and Trade Agreement: Agricultural Trade, October 23, 2020. This report includes data on projected U.S. exports – not actual U.S. exports as stated in the legal text of the trade agreement – based on weekly data on sales of certain agricultural products reported to the U.S. Department of Agriculture.
At the same time, China imported more pork to address local shortages caused by the outbreak, resulting in U.S. pork exports exceeding their 2020 target (see Figure 3). China`s pork imports from the rest of the world were also higher in September, more than 400 percent from 2017. And in one of the few parts of the Phase One agreement with political commitments (Chapter 3), China agreed to remove technical barriers to trade that had slowed pork imports. Beginning with our October 26, 2020 report, we have seasonally adjusted the monthly purchase commitment targets to reflect the relative weight of these products for that month in the 2017 trading data. It should be noted that the proportional increase in the annual targets for 2020 on a monthly basis is provided for information purposes only. Nothing in the text of the agreement suggests that China needs to achieve anything other than the annual targets. Describes the trade agreements in which this country is involved. Provides resources for U.S. companies to obtain information on the use of these agreements.
China`s monetary policy has been another hot topic, as China has deliberately kept its currency undervalued for many years. However, China has moved to a more market-based exchange rate, but China`s monetary policy is still being closely watched. Other issues affecting bilateral trade flows include China`s industrial policies favoring state-owned enterprises, disagreements over China`s WTO obligations, and the failure to protect U.S. intellectual property rights. Simply relying on purchasing targets not only fails to solve China`s problematic policies that hurt Americans, but also helps solidify government planning as opposed to market-oriented outcomes. In particular, because China continues to impose discriminatory retaliatory tariffs on U.S. exporters, only its state-owned enterprises, not the Chinese private sector, will increase many purchases to meet commitments — the opposite of what U.S. policymakers say they want. The goals of the deal also send signals to America`s economic allies that the U.S. is primarily interested in China diverting imports from its suppliers, rather than attacking China`s problematic policies and undermining their confidence in U.S. policy.
Data release note: This update is based on data from October 2020, which was released on October 25, 2020. November 2020 for Chinese imports and U.S. exports – preliminary data on U.S. exports to China, which will be monitored under the agreement, will now be released ahead of the full release scheduled for December 7, 2020. The next update is based on November 2020 data released on December 25, 2020 (Chinese imports) and December 23, 2020 (U.S. exports). Preliminary U.S. export data for October recorded no aircraft imports (Harmonized Tariff Schedules 8800 and 8802); All data revisions will be included in a revision published on December 7. China Customs reports that China`s aircraft imports (8802) in October were only $506 million. All these obstacles and complications add to a political failure.
Whoever the president is, the United States must get China to liberalize its tariffs, remove non-tariff barriers, and rationalize its subsidies and other practices that distort economic incentives. In response to Trump`s trade war, China imposed additional tariffs on more than 50 percent of U.S. exports in 2018 and 2019. It is curious that the legal text of Phase One agreement did not remove, reduce or even mention the word « tariffs, » and it did very little to resolve the United States` main trade problems with China. Instead, the Trump administration presented an excellent case study explaining why simple purchase commitments may not be enough. Details of the basic approach to mapping 2020 annual targets using trading data are available in Bown (2020). Other assumptions made here include the preparation of estimates for 15 distinct product categories, since the agreement includes only aggregate targets for the four manufacturing, agriculture, energy and services industries. .
