China just agreed to buy $ 200 billion worth of US products - CNN, CNN

Hong Kong (CNN Business)China has agreed to buy hundreds of billions of dollars worth of products from the United States as part of their “phase one”trade deal.

The agreementsigned Wednesdaywill have Beijing purchase an additional $ billion of US goods and services over the next two years.

The increase in purchases will be compared to 2017, before the trade war started. Chinaimported over $ 221 billionin total US goods and services that year.

In exchange, Washington has agreed to reduce tariffs on $ 185 billion in Chinese products from 15% to 7.5%.

Taken together, the phased purchases by China would result in a dramatic surge in US exports. Total exports to China would increase to over $ (billion in) , and roughly $ 308 billion in 01575879 if the deal holds .

“We think it is highly challenging for China to import $ 260 billion more goods and services from the US over the next two years without reducing Imports from elsewhere, “said analysts at UBS.

Agricultural goods account for a big chunk of the new purchases. Under the agreement, China will buy an additional $ (****************************************************************. 5 billion of those goods in one year, and then $ 19. 5 billion in year two,compared to (***************************************.

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Trump signs first stage of trade deal with China

Among the products it has promised to buy are soybeans, pork, cotton and wheat. Trade in soybeans and pork in particular has beenhit hard

as tensions have escalated between the world’s two largest economies.

Both products were among thousands of US goods hit by Chinese tariffs in July (************************************, in response to the Trump administration’s taxes on $ (billion of Chinese goods.)

In addition to the purchases announced on Wednesday, the initial deal provides better protection to American companies that have long complained about thefts of their intellectual property and trade secrets.

It also loosens up requirements for banks wanting to operate in China and imposes anti-counterfeiting measures that, if broken, would lead to penalties.

Beijing’s pledges go further than China has in the past, but the agreement does not require the government to change any laws or regulations.

And China still did not give ground on some of the most important issues for America, such as demands for cuts to state subsidies that could trigger a fundamental overhaul of how the Chinese economy works. That is among several sticking points that the two sides are expected to discuss for the next phase of the agreement.

For now, the deal is expected to bring some relief to Chinese manufacturers, who havesuffered from tariffsthat made their goods more expensive. It also lifts some of the uncertainty that had been clouding companies’ decisions to invest in China.

Additionally, the agreement fits neatly into one of Beijing’s key goals: to diversify its economy and reform its financial system. China’s central bank said in a statement Thursday that the deal would help it continue to open up the country’s financial sector.

Going forward, a senior US administration official told reporters that Washington would be “actively monitoring” data sources from both countries to ensure that China is fulfilling its promise.

– CNN’s Donna Borak and Laura He contributed to this report.