Oct 16, 2019

A darkening outlook for phase 1 of the U.S.-China trade deal

President Trump shakes hands with Chinese Vice Premier Liu He. Photo: Win McNamee/Getty Images

The outlook for a meaningful U.S.-China trade deal continues to deteriorate, as the House passed a bill supporting protesters in Hong Kong and China reportedly backtracked on part of the deal it agreed to last week.

The big picture: The House bill would require an annual review of whether Hong Kong is truly separate from Beijing to the point that it justifies the special trading status it receives under U.S. law and would implement sanctions against officials "responsible for undermining fundamental freedoms and autonomy in Hong Kong."

  • Chinese officials unsurprisingly did not take the news well, accusing the U.S. of a "political plot" to thwart China’s development.
  • The Chinese Ministry of Foreign Affairs said that it would take strong measures against the U.S. if the bill passed.

On the agriculture front, Bloomberg reported that Chinese officials are seeking a rollback of $50 billion in tariffs before agreeing to raise purchases of U.S. agriculture to the $40-$50 billion range President Trump said was agreed to in the so-called phase 1 trade deal.

  • China is willing to start buying more U.S. agricultural products immediately as part of the trade deal agreed to in principle last week, but is unlikely to reach $40 billion to $50 billion without sanctions relief, the report said, citing unnamed sources.

Go deeper: Investors signal they hate Trump's "Phase 1" China trade deal

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China warns U.S. it will retaliate if Hong Kong bill becomes law

Protesters rally in Hong Kong on Monday. Photo: Vernon Yuen/NurPhoto via Getty Images

The Chinese government issued a statement on Tuesday threatening the U.S. with retaliatory action if Congress passes legislation that would lead to a mandatory annual review of Hong Kong's special trading status.

Why it matters: The House unanimously passed a bill earlier Tuesday condemning Chinese interference in Hong Kong's affairs and supporting the rights of pro-democracy protestors to demonstrate.

  • The Chinese Foreign Ministry statement warns if the bill is passed into law, it would harm relations between the 2 countries and China would take retaliatory measures.

Go deeper: Top 2020 Democrats punt on China’s Hong Kong crackdown threat

Keep ReadingArrowOct 16, 2019

Trump's promises on "phase 1" deal with China fall flat

President Trump and China's President Xi Jinping, Nov. 2017. Photo: Nicolas Asfouri/Getty Images

It's been a week since President Trump touted his "phase 1" partial trade agreement with China as the greatest-ever deal for U.S. farmers — but China isn't endorsing his promises.

Where it stands: China has not confirmed Trump's claim that it will buy $40 billion–$50 billion worth of U.S. agricultural goods, and it says a final deal would require the U.S. to cancel all existing and future tariffs, CNBC reports. No final decision has been reached to determine if the U.S. will push tariff increases scheduled for Dec. 15.

Go deeperArrowOct 17, 2019

Hong Kong frees murder suspect who triggered massive protests

Chan Tong-kai walks out of the Pik Uk Prison in Hong Kong on Wednesday. Photo: Philip Fong/AFP via Getty Images

Murder suspect Chan Tong-kai, whose case prompted Hong Kong's government to introduce a bill that would've exposed Hong Kongers to extradition to mainland China, was released from prison Wednesday, the BBC reports. He was released as officials were preparing to formally withdraw the controversial bill, per AP.

Why it matters: The bill triggered months of massive demonstrations in the Chinese territory that morphed into a wider pro-democracy protest movement that's become embroiled in U.S. politics. Congress has raised China's ire by pressing ahead with a bill supporting the Hong Kong protesters, and the NBA has become involved in a standoff with Chinese officials over the movement.

Go deeperArrowOct 23, 2019