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A year and a half after launching a costly trade war with China, President Trump is calling a truce. Both the White House and Chinese officials say they've reached a phase one trade agreement. Details are sketchy, but the deal includes some tariff relief in exchange for more farm purchases and other unspecified reforms.
NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: President Trump was in salesman mode this morning. Speaking to reporters in the Oval Office, Trump cast the trade agreement in historic terms.
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PRESIDENT DONALD TRUMP: It's going to ultimately lead to the opening of China, which is something that is incredible because that's a whole, big, untapped market of 1.5 billion people.
HORSLEY: The deal announcement comes just two days before the administration was scheduled to slap new tariffs on another $160 billion worth of Chinese imports, including popular consumer items such as cell phones and children's toys. Asia economic expert Matthew Goodman, who's with the Center for Strategic and International Studies, says suspending those tariffs will bring a sigh of relief to a lot of business owners.
MATTHEW GOODMAN: It's good that the uncertainty has been lifted somewhat, at least for now, and that the tariffs that were supposed to go into effect this week and are not going to go into effect. So American consumers aren't going to face increased iPhone costs.
HORSLEY: The agreement also cuts in half the tariffs that have been leveled since September on another $120 billion worth of Chinese imports, including a lot of clothing and sporting goods. David French of the National Retail Federation calls that a significant step in the right direction, but he hopes it's not the last step. French notes a lot of other costly tariffs are still in place.
DAVID FRENCH: We would like to see an end to the trade war. The trade war has hurt U.S. exporters. It's hurt U.S. farmers. It's hurt U.S. consumers. And it's hurt U.S. retailers.
HORSLEY: Farmers in particular have been caught in the crossfire. When the Trump administration launched its trade war, China retaliated by sharply cutting its purchases of U.S. farm goods. Farm exports to China plunged from $19 billion in 2017 to about $9 billion the following year. The U.S. government has made up some of that difference with farm subsidies. With today's agreement, Trump says China's promised to buy a lot more American pork and soybeans.
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TRUMP: I think in agriculture, they will hit $50 billion, yes.
UNIDENTIFIED REPORTER: Next year, or when? What's...
TRUMP: Pretty soon. They've already stepped it up.
HORSLEY: Chinese officials didn't put a dollar figure on their commitment. Fifty billion dollars in annual purchases would be nearly twice as much as China's ever bought from U.S. farmers and would represent more than a third of America's total farm exports. Matthew Goodman is skeptical.
GOODMAN: I'm not sure we're capable of producing that many soybeans and other products in the time allotted.
HORSLEY: Still, boosting China's farm purchases is the easy part of this deal. After all, the country does have a lot of mouths to feed. More challenging is getting China to make structural reforms, like scaling back subsidies for its state-owned businesses and stop forcing American companies to share their technology as a price of operating in China.
Goodman says Trump deserves credit for shining a spotlight on those issues. But after a year and a half of trade uncertainty and tens of billions of dollars in tariffs, Goodman calls this deal a pale shadow of what the White House initially hoped for.
GOODMAN: If the reports are accurate about what's in this deal, I think we spent a lot for very little. It's hard to feel that this really was worth it in that sense.
HORSLEY: The administration says China has committed to protecting intellectual property and halting forced technology transfers. But so far, it's offered no details. A written text of the agreement is expected in a few weeks, in time for a signing ceremony in early January.
Scott Horsley, NPR News, Washington.
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