On Monday, after a Chinese state-run newspaper reported some government advisers in Beijing were urging fresh talks and possibly invalidating the U.S.-China “Phase 1” trade agreement signed in January this year, the U.S. President, Donald Trump, made a statement that he was opposed to renegotiating terms of the deal.
In a White House press conference, Trump, who has even thought about going back on the agreement, stated that he wanted to see if Beijing lived up to its end of the deal, i.e., to increase their imports of American goods significantly.
“No, not at all. Not even a little bit,” Trump replied when asked if he would consider the thought of reworking Phase 1. “I’m not interested. We signed a deal. I had heard that too, they’d like to reopen the trade talk, to make it a better deal for them.”
Anonymous Chinese advisers from the inner circle involved in the talks have hinted to the Global Times that China would attempt to annul the Phase 1 trade agreement and renegotiate a new agreement which would be more favorable to their side.
The People’s Daily, the official newspaper of China’s ruling Communist Party, publishes the Global Times, which though not an official mouthpiece, publishes views which are believed to be that of its leaders.
Chinese importers purchased an estimated 240,000 tonnes of U.S. soybeans just hours after the report was published on Monday, estimating to around 240,000 tonnes of U.S. soybeans on Monday itself to be shipped in July. Two traders experienced with such deals have predicted the possibility of additional sales in the near future.
According to U.S. officials, the purchases were part of China’s strategy to start the ball rolling to have other parts of the trade deal implemented, especially those related to intellectual property protections.
Repeated media queries on the Global Times article received no response from the U.S. Trade Representative’s office.
Washington agreed to abolish tariffs in stages on imports of Chinese goods, and Beijing pledged to purchase at least $200 billion worth of additional U.S. goods and services for a period of two years under the Phase 1 agreement signed in January.
Trump believes the cause of the Covid-19 outbreak stemmed from China’s initial poor handling in containing the virus in Wuhan which subsequently led to a worldwide pandemic, and caused thousands of deaths in the U.S. deaths and millions of unemployed Americans.
Last week, Trump said he was “very torn” upon contemplating on whether to exit the Phase 1 trade agreement. His comments could not have come at a worse time, as senior trade representatives from both nations had just agreed to proceed with full implementation of the agreement.
Subsequently, the rising U.S.-China tensions over the coronavirus outbreak have thrown the trade deal into a deadlock and shed doubts on a Phase 2 discussion.
The Chinese government has repeatedly rejected the Trump administration’s claim that there is evidence the new coronavirus came from a Wuhan laboratory.
On Monday, further tension arose when it was made known the U.S. administration plans to release a warning alleging that the Chinese government is using a group of computer hackers in an attempt to steal vital information from U.S. researchers.
Requests for comment did not receive an immediate response from U.S. intelligence and law enforcement officials.
Malicious attacks from the United States have brought forth a “tsunami of anger” among Chinese trade insiders according to the Global Times, after compromises were made in the Phase 1 pact by China.
“It’s in fact in China’s interests to terminate the current Phase 1 deal,” a trade adviser to the Chinese government told the Global Times, citing the weakening U.S. economy and upcoming U.S. presidential elections. “The U.S. now cannot afford to restart the trade war with China if everything goes back to the starting point.”
A former White House trade adviser, Clete Willems, who played an active role in the negotiations in the Phase 1 trade agreement, said China kept to its end of the bargain on nearly all of the structural provisions laid out in the agreement; even the newly added rules on intellectual property protection.
“I don’t think we’re at the point where we should give up on the deal. It has yielded positive results thus far,” said Willems, who is now with the Akin Gump law firm in Washington.
12th May 2020 17:12
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