China is still behind on buying enough U.S. goods to fulfill ‘phase one’ trade deal

CNBC reports that according to the U.S.-based Peterson Institute for International Economics, as the trade deal between the U.S. and China runs into its second year, Chinese purchases are still running short of the agreed amount.

Both countries signed a phase one trade agreement in January 2020, just weeks before Covid-19 began to spread rapidly in China and subsequently turned into a global pandemic. The deal stipulated that relative to imports from the U.S. in 2017, China needed to buy at least $200 billion more in U.S. goods and services over the next two years.

To stay on track with the agreement, China would have needed buy $64.5 billion worth of U.S. goods during the first four months of this year, Peterson Institute senior fellow Chad P. Bown estimated, citing Chinese customs data.

However, the data showed China’s purchases of U.S. goods reached only 73% of the year-to-date target as of April, the report said.

Based on U.S. data, the level of progress falls to 60%, the institute said.

The two-year agreement is set to end in December. Chinese purchases of U.S. goods fell more than 40% short in 2020, according to the institute.