By Robert Schroeder, MarketWatch
President Donald Trump announced a “phase one” trade deal with China on Friday, saying Beijing had agreed to targeted purchases of U.S. goods and will avoid tariffs that had been set to go into place on Sunday.
Trump said in a pair of tweets that the Chinese had agreed to “many structural changes and massive purchases” of American farm, energy and manufactured goods.
After Chinese Vice Minister Wang Shouwen, speaking in Beijing, didn’t specify purchase figures, Trump told reporters China would likely buy $50 billion in U.S. farm products. A senior administration official said China’s purchases of those and other goods would total $200 billion over two years. The deal also covers intellectual property, financial services, currency /zigman2/quotes/210561991/realtime/sampled USDCNY -0.0243% and other areas, according to the U.S. Trade Representative .
Separately, Trump said tariffs that had been scheduled to begin Sunday on $156 billion in Chinese goods were being scrapped.
“The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal,” the president wrote, tweeting as Chinese officials were briefing reporters in Beijing.
25% TARIFFS REMAIN
Trump also agreed to reduce by half — from 15% to 7.5% — the tariffs on about $120 billion of goods, but he said separate 25% levies on $250 billion in imports would remain.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.94% and Nasdaq /zigman2/quotes/210598365/realtime COMP -2.13% finished the week at records, following the announcements from Beijing and Washington, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.04% climbed about 0.01%. The U.S. dollar /zigman2/quotes/210598269/delayed DXY +0.15% was off about 0.2% against a basket of its trading peers.
Senate Majority Leader Chuck Schumer, a New York Democrat, said Trump had “sold out” for an unreliable promise by China “to purchase some soybeans.”
Trump announced the deal as Democrats on the House Judiciary Committee took a step toward impeaching him, sending charges of obstruction and abuse of power to the House floor for a full vote that is expected sometime next week. With the Senate widely expected to acquit Trump, markets have paid little attention to the impeachment drama from Washington.
Speaking alongside visiting Paraguayan President Mario Abdo Benitez, Trump called the impeachment effort an “embarrassment to this country.” He has denied wrongdoing. Democrats are focused on Trump’s pressure on Ukrainian President Volodymyr Zelensky to launch investigations into Democratic presidential front-runner Joe Biden and his son Hunter, as well as into a theory that Ukraine interfered in the 2016 presidential election.