The “Phase One” trade deal between the United States and China is a “historic” agreement that is “going to help grow our economy faster,” President Donald Trump’s chief economic adviser Larry Kudlow said.
“We reckon in 2020 and 2021, at least a half a point of additional GDP (gross domestic product), which will probably translate into another million jobs on top of what we’ve already got,” he said during an appearance on Fox News’ “America’s Newsroom” on Wednesday morning.
Kudlow praised U.S. trade representative Robert Lighthizer and Treasury Secretary Steve Mnuchin for their work on the deal.
“The biggest hill was getting phase one. Which has never been done before. The president’s leadership, including the tariffs, the work of Bob Lighthizer, Steve Mnuchin, our whole trade principals team. Never done before, this is historic,” Kudlow said.
Work on “phase two” would start right away, Kudlow said, adding: “The toughest nut to crack in phase two will be to really level the playing field and take care of unfair practices, regarding forced transfers of technology.”
Later Jan. 15, Trump and China’s Vice Premier Liu He signed the accord during a ceremony at the White House.
“Our negotiations were tough, honest, open, and respectful, leading us to this really incredible breakthrough,” Trump said. “Most people thought this thing will never happen. It should have happened 25 years ago, by the way.”
The deal includes China committing to buy $200 billion worth of additional U.S. goods and services over the next two years, including $40-50 billion of agricultural goods each year. The agreement promises an increased purchase of American manufactured goods, food, agricultural and seafood products, energy, and services.
These purchases are expected to continue on the same trajectory for several years after 2021 and contribute to the rebalancing of the U.S.-China trade relations, according to a factsheet (pdf) on the deal released by the administration
In return, Washington agreed to modify its Section 301 tariff actions and canceled or reduced other tariffs. China also canceled scheduled tariffs.
Not everyone was pleased with the deal.
Senate Minority Leader Chuck Schumer (D-N.Y.), who has praised Trump for his dealings with China, said on the Senate floor in Washington on Wednesday that the phase one trade deal “is a historic blunder.”
“Several harmful policies and practices are reportedly unaddressed,” he said. “First, there appear to be no commitments to end China government’s subsidy program that continues to hurt U.S. industries and workers, at all levels. Second, there appear to be no commitments to reform the Chinese policy of state-owned enterprises that unfairly compete with American enterprises and take American jobs away, while they’re allowed to freely sell here while our best companies can’t sell there.”
“Third, there appear to be no commitments to curtail the illegal dumping of Chinese products into our markets, which puts American firms out of business and workers out of a job,” he continued. “Fourth, glaringly, there appear to be no significant commitments to definitely end China’s predatory and flagrant cyber theft of American intellectual property, which has stolen a generation of American jobs and American wealth. Fifth, concerning what the deal achieves in terms of agricultural purchases, it appears the Trump administration has not addressed the fact that China has existing contracts with countries like Brazil and Argentina.”
Emel Akan contributed to this report.