Aug 26, 2020 - Economy

China is less than halfway to its "phase 1" trade deal targets

Reproduced from Peterson Institute for International Economics; Chart: Axios Visuals

To satisfy the conditions of the phase one U.S.-China trade deal, China is expected to purchase at least $200 billion more in U.S. exports combined in 2020 and 2021. Data shows that as of July they are more than 50% behind the pace of expected purchases.

By the numbers: So far, China's purchase of covered products was $39.3 billion, compared with a year-to-date target of $83.2 billion, Chad Bown, a fellow at the Peterson Institute for International Economics, notes.

  • Through July, Chinese imports of all uncovered products from the U.S. were actually 28% lower than over the same period in 2017.

Driving the news: Following a videoconference between senior U.S. and Chinese officials on Monday, both sides said they were committed to carrying out the deal.

  • More importantly, no adjustments or plans for China to realistically meet the targets were announced despite the severe disruption to its economy as a result of the coronavirus pandemic.

Why it matters: With tariffs still in place on most Chinese exports to the U.S. and on many Chinese imports from the U.S., businesses and consumers are still paying the trade wars costs, but are seeing less than half of the purported benefits from the conflict's lone agreement.

  • In particular, American farmers, who have suffered greatly from the trade war, were anticipating a boost from the increased Chinese purchases after retaliation from Beijing caused a severe decline in commodity prices and exports last year.

Yes, but: Earlier this month the Department of Agriculture reported the sale of 126,000 tonnes of soybeans to China, the eighth consecutive weekday with large sales to Chinese buyers.

  • And U.S. oil traders, shipbrokers and Chinese importers reportedly told Reuters that Chinese state-owned oil firms have plans to carry at least 20 million barrels of U.S. crude for August and September.

Between the lines: As Axios' Bethany Allen-Ebrahimian wrote last week, trade is the last major area where the U.S. is still relying on traditional diplomacy with China, as President Trump has ratcheted up measures targeting China heading into the November presidential election.

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