US, China sign phase-one trade deal

Author: Al Greenwood

2020/01/15

HOUSTON (ICIS)--The US and China signed on Wednesday a trade deal along the lines that the countries discussed back in October.

Those include commitments by China to purchase more goods from the US; to adopt policies that will protect intellectual property; and to reduce pressure on companies to transfer technology.

Both countries abstained from imposing another batch of tariffs on each other. In addition, the US lowered tariffs on $120bn worth of Chinese imports to 7.5% from 15%.

Most of these tariffs covered finished goods and included very few chemicals and plastics. Most of the tariffs on these products remain.

Moreover, China did not agree to remove the tariffs it has imposed on US products, many of which cover plastics and chemicals.

During a signing ceremony, US President Donald Trump said the two countries will remove the tariffs if they can reach a subsequent trade deal.

Trump did not say when the two could sign such a phase-two deal. He did not expect the US and China will sign a phase-three deal.

Regarding the phase-one deal, China made commitments to protect US intellectual property and to fight pirated and counterfeit goods, Trump said.

China also will address forced technology transfer, he said. "Transfers and licensing of technology will be based on market terms that are fully voluntary and reflect mutual agreement."

China also made commitments to buy at least $200bn worth of US agricultural goods, energy products and services in 2020 and 2021, according the trade agreement. This is beyond what the country imported from the US in 2017.

- China will buy at least $32.9bn of US manufactured goods in 2020 and $44.8bn in 2021.

- China will buy at least $12.5bn of agricultural goods in 2020 and $19.5bn in 2021.

- China will buy at least $18.5bn worth of energy products in 2020 and $33.9bn in 2021.

- China will buy at least $12.8bn worth of services in 2020 and $25.1bn in 2021.

Apparently, China will not increase US imports at the expense of its existing trade partners.

"This agreement is not directed at nor will it affect [unintelligible] any third countries. It is in line with WTO rules," said Liu He, China's vice premier.

Commentators have said that any import commitments from China could run afoul of regulations from the World Trade Organization (WTO) if they were made at the expense of purchases from other countries.

The following chemicals and energy products were highlighted in the agreement. Plastics were not found. Highlights for chemicals include ammonia, phenol and caustic soda.

The harmonised schedule (HS) codes and product description are listed.

ENERGY

HS Code Product Description
271111 Liquefied natural gas
2709 Petroleum oils and oils obtained from bituminous minerals, crude
271112 Liquefied propane
271113 Liquefied butane
27111990 Other unlisted liquefied petroleum gases and gaseous hydrocarbons
271311 Uncalcined petroleum coke
271312 Calcined petroleum coke
271012250 Naphtha (Excluding Motor Fuel), blend Stock not containing biodiesel
2701 Coal; briquettes, ovoids and similar solid fuels manufactured from coal

CHEMICALS

HS Code Product Description
2801 Fluorine, chlorine, bromine and iodine
2802 Sulfur, sublimed or precipitated; colloidal sulfur
2803 Carbon (carbon blacks and other forms of carbon not elsewhere specified or included)
2804 Hydrogen, rare gases and other nonmetals (including solar-grade polysilicon)
2805 Alkali or alkaline-earth metals; rare-earth metals, scandium and yttrium, whether or not intermixed or interalloyed; mercury
2806 Hydrogen chloride (Hydrochloric acid); chlorosulfuric acid
2807 Sulfuric acid; oleum
2808 Nitric acid; sulfonitric acids
2809 Diphosphorus pentaoxide; phosphoric acid;polyphosphoric acids, whether or not chemically defined
2810 Oxides of boron; boric acids
2811 Other inorganic acids and other inorganic oxygen compounds of nonmetals
2812 Halides and halide oxides of nonmetals
2813 Sulfides of nonmetals; commercial phosphorus trisulfide
2814 Ammonia, anhydrous or in aqueous solution
2815 Sodium hydroxide (Caustic soda); potassium hydroxide (Caustic potash); peroxides of sodium or potassium
2816 Hydroxide and peroxide of magnesium; oxides, hydroxides and peroxides, of strontium or barium
2817 Zinc oxide; zinc peroxide
2818 Artificial corundum, whether or not chemically defined; aluminum oxide; aluminum hydroxide
2819 Chromium oxides and hydroxides
2820 Manganese oxides
2821 Iron oxides and hydroxides; earth colors containing 70 percent or more by weight of combined iron evaluated as Fe2O3
2822 Cobalt oxides and hydroxides; commercial cobalt oxides
2823 Titanium oxides
2824 Lead oxides; red lead and orange lead
2825 Hydrazine and hydroxylamine and their inorganic salts; other inorganic bases; other metal oxides, hydroxides and peroxides
2826 Fluorides; fluorosilicates, fluoroaluminates and other complex fluorine salts
2827 Chlorides, chloride oxides and chloride hydroxides; bromides and bromide oxides; iodides and iodide oxides
2828 Hypochlorites; commercial calcium hypochlorite; chlorites; hypobromites
2829 Chlorates and perchlorates; bromates and perbromates; iodates and periodates
2830 Sulfides; poly sulfides, whether or not chemically defined
2831 Dithionites and sulfoxylates
2832 Sulfites; thiosulfates
2833 Sulfates; alums; peroxosulfates (persulfates)
2834 Nitrites; nitrates
2835 Phosphinates (hypophosphites), phosphonates (phosphites) and phosphates; polyphosphates, whether or not chemically defined
2836 Carbonates; peroxocarbonates (percarbonates); commercial ammonium carbonate containing ammonium carbamate
2837 Cyanides, cyanide oxides and complex cyanides
2839 Silicates; commercial alkali metal silicates
2840 Borates; peroxoborates (perborates)
2841 Salts of oxometallic or peroxometallic acids
2842 Other salts of inorganic acids or peroxoacids (including aluminosilicates whether or not chemically defined), other than azides
2843 Colloidal precious metals; inorganic or organic compounds of precious metals, whether or not chemically defined; amalgams of precious metals
2844 Radioactive chemical elements and radioactive isotopes (including the fissile or fertile chemical elements and isotopes) and their compounds; mixtures and residues containing these products
2845 Isotopes other than those of heading 2844; compounds, inorganic or organic, of such isotopes, whether or not chemically defined
2846 Compounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals
2847 Hydrogen peroxide, whether or not solidified with urea
2848 Phosphides, whether or not chemically defined, does not include ferrophosphorus
2849 Carbides, whether or not chemically defined
2850 Hydrides, nitrides, azides, silicides and borides, whether or not chemically defined, other than compounds which are also carbides of heading 2849
2852 Inorganic or organic compounds of mercury, whether or not chemically defined, excluding amalgams
2853 Other inorganic compounds (including distilled or conductivity water and water of similar purity); liquid air (whether or not rare gases have been removed); compressed air; amalgams, other than amalgams of precious metals
2901 Acyclic hydrocarbons
2902 Cyclic hydrocarbons
2903 Halogenated derivatives of hydrocarbons
2904 Sulfonated, nitrated or nitrosated derivatives of hydrocarbons, whether or not halogenated
2905 Acyclic alcohols and their halogenated, sulfonated, nitrated or nitrosated derivatives (excluding methanol, mannitol, and sorbitol)
2906 Cyclic alcohols and their halogenated, sulfonated, nitrated or nitrosated derivatives
2907 Phenols; phenol-alcohols
2908 Halogenated, sulfonated, nitrated or nitrosated derivatives of phenols or phenol-alcohols
2909 Ethers, ether-alcohols, ether-phenols, ether-alcohol- phenols, alcohol peroxides, ether peroxides, ketone peroxides (whether or not chemically defined), and their halogenated, sulfonated, nitrated or nitrosated derivatives
2910 Epoxides, epoxyalcohols, epoxyphenols and epoxyethers, with a three-membered ring, and their halogenated, sulfonated, nitrated or nitrosated derivatives
2911 Acetals and hemiacetals, whether or not with other oxygen function, and their halogenated, sulfonated, nitrated or nitrosated derivatives
2912 Aldehydes, whether or not with other oxygen function; cyclic polymers of aldehydes; paraformaldehyde
2913 Halogenated, sulfonated, nitrated or nitrosated derivatives of products of heading 2912
2914 Ketones and quinones, whether or not with other oxygen function, and their halogenated, sulfonated, nitrated, or nitrosated derivatives
2915 Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives
2916 Unsaturated acyclic monocarboxylic acids, cyclic monocarboxylic acids, their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives
2917 Polycarboxylic acids, their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives
2918 Carboxylic acids with additional oxygen function and their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives
2919 Phosphoric esters and their salts, including lactophosphates; their halogenated, sulfonated, nitrated or nitrosated derivatives
2920 Esters of other inorganic acids of nonmetals (excluding esters of hydrogen halides) and their salts; their halogenated, sulfonated, nitrated or nitrosated derivatives
2921 Amine-function compounds
2922 Oxygen-function amino-compounds
2923 Quaternary ammonium salts and hydroxides; lecithins and other phosphoaminolipids, whether or not chemically defined
2924 Carboxyamide-function compounds; amide-function compounds of carbonic acid
2925 Carboxyimide-function compounds (including saccharin and its salts) and imine-fimctinn compounds
2926 Nitrile-function compounds
2927 Diazo-, azo- or azoxy-compounds
2928 Organic derivatives of hydrazine or of hydroxylamine
2929 Compounds with other nitrogen function
2930 Organo-sulfur compounds
2931 Other organo-inorganic compounds
2932 Heterocyclic compounds with oxygen hetero-atom(s) only
2933 Heterocyclic compounds with nitrogen hetero-atom(s) only
2934 Nucleic acids and their salts, whether or not chemically defined; other heterocyclic compounds
2935 Sulfonamides
2936 Provitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent
2937 Hormones, prostaglandins, thromboxanes and leukotrienes, natural or reproduced by synthesis; derivatives and structural analogues thereof, including chain modified polypeptides, used primarily as hormones
2938 Glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives
2939 Alkaloids, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives
2940 Sugars, chemically pure, other than sucrose, lactose, maltose, glucose and fructose; sugar ethers, sugar acetals and sugar esters, and their salts, other than products of heading 2937,2938 or 2939
2941 Antibiotics
2942 Other organic compounds
2933 Heterocyclic compounds with nitrogen hetero-atom(s) only
2934 Nucleic acids and their salts, whether or not chemically defined; other heterocyclic compounds
2935 Sulfonamides
2936 Provitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent
2937 Hormones, prostaglandins, thromboxanes and leukotrienes, natural or reproduced by synthesis; derivatives and structural analogues thereof, including chain modified polypeptides, used primarily as hormones
2938 Glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives
2939 Alkaloids, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives
2940 Sugars, chemically pure, other than sucrose, lactose, maltose, glucose and fructose; sugar ethers, sugar acetals and sugar esters, and their salts, other than products of heading 2937,2938 or 2939
2941 Antibiotics
2942 Other organic compounds

adds paragraph 10, "This is beyond what the country imported from the US in 2017."

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