BEIJING (Reuters) – China is committed to its Phase 1 trade deal with the United States and is working towards meeting its promise to boost U.S. purchases, even though the pace of buying has been restrained by the coronavirus outbreak, three Chinese sources said.
Under the Phase 1 deal signed in January, Beijing pledged to buy at least $200 billion in additional U.S. goods and services over two years and Washington agreed to roll back tariffs in stages on Chinese goods.
But U.S. President Donald Trump has threatened to terminate the deal if China fails to meet its purchase commitments.
China’s April imports of U.S. goods slumped 11.1% in dollar terms from a year earlier, weighed by weaker domestic demand because of the epidemic.
Sino-U.S. tensions have mounted over the coronavirus outbreak, with Trump blaming China for causing thousands of deaths and millions of job losses in the United States.
Chinese officials have on many occasions in recent months discussed how to fulfil China’s commitments under the deal to the fullest extent, two officials in Beijing who are familiar with the situation told Reuters on Tuesday.
“If both sides are working in the same positive direction, for months in which purchases can’t reach the agreed quotas, those can be supplemented in other months,” one of them said.
“After all, it’s not a deal that can be completed with one single transaction. The difficulties caused by the epidemic should also be taken into consideration.”
The Global Times, a tabloid controlled by the Chinese state, reported on Monday that unidentified advisers close to the talks have suggested that Chinese officials revive the possibility of renegotiating a new trade pact.
The Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party. While not an official party mouthpiece, the Global Times’ views are believed at times to reflect those of its leaders.
One of the officials said the possibility of cancelling the Phase 1 deal and restarting negotiations on another agreement is not high.
“At least for now there is no mention of this inclination in exchanges between the teams on both sides,” the official said. “After all, the Phase 1 deal was hard-won.”
In an apparent show of good will, the Chinese finance ministry on Tuesday China announced a list of 79 U.S. products eligible for waivers from retaliatory tariffs imposed at the height of the trade war.
The finance and commerce ministries could not immediately be reached for comment outside business hours.
“With China’s coronavirus epidemic under control, China’s overseas procurement will gradually accelerate to make up for the lag,” said a source close to government officials making decisions on trade issues.
“The outbreak is testing China’s demand as well as the ability of the United States to supply.”
(Reporting by Beijing Newsroom; Additional reporting by Jing Xu; Writing by Ryan Woo, Editing by Timothy Heritage)