US China Agreement Phase I

US and China made progress on 10/11/19 with agreements on handling intellectual property, ending forced technology transfer, ending currency manipulation and ensuring compliance with WTO trade practices. In addition Phase I will open up US financial services access to China and increasing US imports of ag products to China to $40-50 billion up from the normal $16 billion and current $8 billion.

In addition to plans to increase US Tariffs, China needed to increase ag imports. Timing was right. African Swine Fever has destroyed over 30% of China’s hogs and a worm infestation has devastated China’s crops. China needed to increase ag imports.  US Soybean order for China is 20 billion tons.

Structural issues on ag, corrected bio tech issues. Free market Currency, foreign exchange, opening up US to financial services.  Technology transfer. Phase I, Phase II, 4 or 5 weeks to write up and sign. 

Tariffs continue at 25% and other levels to remain in effect.

The Tariff increase planned from 25% to 30% that was scheduled for 10/15/19 is suspended. The Tariffs scheduled to go from 30% to 35% on 12/15/19 are also suspended.

Dispute settlement process will be in place. Huawei is a separate problem. Biden corruption is up to China. We welcome Chinese students based on merit.  Banks, credit card companies open. Hong Kong resolution looks good.

Tariffs worked and produced a deal that is good for both the US and China. EU put 66% tariffs on China. Supply chains need to move back to the US.

China faced a perfect storm. If they continued to refuse to change their ways, US Tariffs would have increased to 35% to accelerate their loss of exports. Europe is flat and China could expect reduced exports to Europe. China has already lost manufacturing jobs. Finally, they may have realized that securing a trade agreement with the US was in their best interest.

China will need to use their manufacturing expertise to create their own global brands to compete in all industries. This will give China the chance to establish their own global companies. The Chinese government should hand this task to their most capable engineers and get out of their way.

Norb Leahy, Dunwoody GA Tea Party Leader