US, China sign phase-one trade deal

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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