U.S. and China Sign Phase 1 Trade Deal

U.S. and Chinese representatives today signed off on Phase One of a trade deal that eases U.S. tariffs on Chinese goods.

The Phase One deal calls off a U.S. plan to impose tariffs on about $156 billion in Chinese consumer goods including cell phones and laptops. The U.S. also cut the tariff rate in half from 15 percent to 7.5 percent on tariffs  it imposed in September 2019 on about $120 billion in Chinese products – including printers, copiers, and their supplies.

In return, China committed to buying more U.S. agricultural goods and other products – up to $200 billion worth – and to improve protections for American technology and trade secrets.

Technology Transfer Agreement

For the first time in any trade agreement, China  agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government. China has also committed to providing ” transparency, fairness, and due process in administrative proceedings and to have technology transfer and licensing take place on market terms,” according to the U.S. Trade Representative’s office.

China also promised to stop directing or supporting outbound investments aimed at acquiring foreign technology.

Phase Two

President Trump also said today that remaining tariffs would be lifted following a Phase Two  deal with China, but said that such a deal would not likely be finalized until after the November 2020 U.S. presidential election.

In the meantime, various printer/copier companies have shifted some production of their hardware to other Southeast Asia countries in order to avoid the tariffs.

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