WASHINGTON/BEIJING/NEW YORK -- The U.S. and China signed a long-awaited "phase one" trade agreement at the White House on Wednesday, easing a 18-month conflict with promises including $200 billion in purchases of American goods from Beijing over the next few years and a modest tariff rollback from Washington.
"Today we take a momentous step... toward a future of fair and reciprocal trade as we sign phase one of the historic trade deal between the United States and China," U.S. President Donald Trump said at the signing ceremony, which was attended by officials from both countries as well as leaders of large American corporations.
"I want to thank President Xi [Jinping], who is watching as we speak, and I'll be going over to China in the not-too-distant future to reciprocate," Trump said, referring to "phase two" negotiations which he has said will begin right away.
Chinese Vice Premier Liu He, Beijing's top trade negotiator, called the phase one deal a "mutually beneficial and win-win agreement" and said both sides should "strictly honor the agreement and accommodate each other's core concerns." Liu also promised broad economic reforms and that "China will open itself even wider."
The seven-part, 86-page deal covers topics including intellectual property protections and protections against forced technology transfers, a long-standing complaint among American companies operating in China. But it is less comprehensive than the 150-page agreement that was gutted by Beijing in May.
Whether the agreement will lead to a lasting trade truce remains uncertain. While Washington will on Jan. 30 cut in half the 15% tariffs on $120 billion in Chinese imports imposed in September, its other duties on $250 billion in goods remain untouched, and the rollback can be reversed if the U.S. finds that Beijing is not holding up its end of the bargain.
Wednesday's agreement says China has 30 working days to put together an intellectual property protection action plan.
With a presidential election in November, Trump's top priority is boosting U.S. agricultural exports to appeal to voters in farm states on whom the trade war has taken a heavy toll.
China agreed to increase imports of American agricultural products to $40 billion or so a year -- much higher than the 2012 peak of $26 billion. While its soybean purchases from the U.S. dropped 22% on the year for the 11 months through November, they grew in each of the last five months of that period, thanks partly to tariff waivers.
Beijing is also expected to buy more meat, both to meet targets under the deal and to stabilize prices as an African swine fever outbreak decimates Chinese pig stocks. Its imports of pork and beef have already jumped, with beef purchases hitting a record $10.9 billion for the 11 months through November.
The deal also includes language that addresses competitive currency devaluation, stating that both countries reserve the right to request the International Monetary Fund to intervene. Earlier this week, Washington dropped China from its currency manipulator list.
In addition, China has committed to further open up its financial markets -- allowing foreign companies to establish fully-owned operations in the country's securities, fund management and futures sectors by April 1.
Progress on structural issues is mixed. Provisions restricting forced technology transfers by Beijing occupy just over two pages in the phase one agreement. The lack of fresh content may be due to the fact that China enacted legislation this month to ban the practice. A more detailed plan that includes legal measures were left for the second phase of negotiations, a U.S. government source said.
Other issues were left untouched, including Chinese subsidies -- such as low-interest loans to technology companies through state-owned banks -- that Washington has criticized as violating World Trade Organization rules.
While the partial deal was reached in time to pull China and the U.S. back from a worst-case scenario fallout, in terms of substance the agreement was not a triumph for either side, many observers say.
"It's been said that [the deal] is all concessions by China, but postponing dealing with the structural issues is a concession by the U.S.," said a Chinese source familiar with the negotiations.