December 17, 2019

U.S. – China Phase One Deal Reached

On Friday, December 13, the White House announced that it reached a phase one deal with China—the most notable step, thus far, toward resolving the nearly two-year trade conflict that has significantly harmed the agriculture industry. While full details and numbers are expected to be released soon, the general overview is that the deal addresses agriculture, intellectual property, technology, financial services and enforcement measures. 

“President Trump is following through on his promise to rebalance the relationship between the U.S. and many of our global trading partners. In the wake of the early harvest trade deal with Japan and the U.S.-Mexico-Canada Agreement, the phase one trade deal with China represents another encouraging step forward in the effort to level the playing field for American farmers in this important market,” said Western Growers President & CEO Tom Nassif in a press statement.

China appears to have committed to returning to 2017 levels of U.S. purchases, plus $200 billion, in two years, essentially doubling the United States’ total annual exports to China. This is across all sectors; target purchase amounts for specific sectors or commodities are not expected to be released publicly. The deal is tentatively expected to be signed in early January 2020, with enactment 30 days after. According to President Trump, negotiations on phase two are expected to begin immediately in early 2020, but this remains in flux.

Western Growers has long been pushing the Administration to resolve this conflict and restore normal terms of trade for our industry. In an earlier letter to USTR with industry allies, WG urged the elimination of China’s retaliatory tariffs on fresh fruit, vegetables and tree nuts. WG also highlighted matters like reductions or eliminations of certain pre-retaliation tariff rates, as well as improvements to China’s sanitary and phytosanitary (SPS) regime. This regime can be notoriously difficult to navigate and has repeatedly blocked several U.S. commodities from the country. As such, certain other crops like strawberries require more than just retaliatory tariff removal to truly penetrate the market.

Western Growers will continue to follow the progress of the negotiations closely and reiterate the industry’s needs to USTR, USDA and Congress. If you or your operation has current or previous issues getting into the China market (tariffs or otherwise), we encourage you to contact us with your stories at [email protected].

Click here to read Western Growers’ full statement on the U.S.-China Phase One Trade Agreement.