The International Trade Council has expressed concern over China’s shortfall in meeting its commitment to purchase an extra $200 billion worth of US goods over 2020 and 2021. This commitment was part of a phase one trade deal aimed at resolving the trade war between the world’s two largest economies.
The agreement saw China agree to purchase the goods in exchange for reduced tariffs on $120 billion worth of US goods. However, since the Covid-19 pandemic, the US trade deficit with China has surged, and China has failed to meet its targets.
Despite US imports of Chinese goods being driven by medical goods and equipment used for the work from home boom, China still exported nearly three times as much as it imported from the US in December 2020, according to Chinese customs figures.
Under the January 2020 trade agreement, the additional purchases are based on 2017 levels and only apply to specific categories of goods, including agricultural, manufactured, and energy products. The Peterson Institute estimates that China would need to purchase $173 billion worth of goods to meet the requirement.
However, the latest figures from Chinese customs show that China imported just under $135 billion from the US in 2020, with only $100 billion worth of goods counting under the agreement. This amounts to just 58% of what China committed to under the agreement, according to the Peterson Institute.
China imported 64% of its targets for agricultural products, 60% for manufactured products, and 39% for energy products. The International Trade Council has expressed concern over China’s failure to meet its targets and urges both countries to continue to work towards a mutually beneficial trade relationship.