(CBS News) — President Donald Trump and Chinese Vice Premier Liu He are signing a “Phase One” trade deal in the White House’s East Room Wednesday morning, after lengthy negotiations and a nearly two-year-long trade war that has hurt U.S. farmers and created a drag on global economic growth. But Mr. Trump announced tariffs on Chinese goods will remain until a “Phase Two” agreement can be reached.
“I’m leaving them on because otherwise we have no cards to negotiate with,” the president said.
Those tariffs will be lifted as soon as a next-step agreement is reached, the president said. Mr. Trump touted the “Phase One” deal as historic.
“This is a very important and remarkable occasion,” Mr. Trump told the audience Wednesday. “Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade as we sign Phase One of the historic trade deal between the United States and China. Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families. I want to thank President Xi, who is watching as we speak, and I’ll be going over to China in the not too distant future to reciprocate, but I want to thank President Xi, a very very good friend of mine.”
Then the president decided to name what seemed like half the audience, from members of Congress and the industry, as the Chinese delegation waited patiently off to the side and the teleprompter remained stuck on one line.
“China is helping us with North Korea,” the president eventually continued. “China is helping us with a lot of the things that they could be helping us with. You don’t see it in the deal. But they have been very very helpful with respect to Kim Jong Un, who has great respect for President Xi. And it’s all a very very beautiful game of chess or game of poker or I can’t use the word checkers because it’s far greater than any checker game that I’ve ever seen. But it’s a very beautiful mosaic.”
The agreement, according to the White House, addresses intellectual property protection and enforcement, ending forced technology transfer, the expansion of American agricultural purchases, ending currency manipulation and rebalancing the U.S.-China trade relationship.
Under the Phase One deal, some tariffs will remain in place and. The levies that would have hit American consumers hard, the price hikes on goods including mobile phones and computer monitors, have been put off for now under the deal.
As part of the agreement, the Chinese will also be buying up to $200 billion in U.S. goods, including agricultural products like soybeans and pork, offering some relief to U.S. farmers. Before the signing ceremony, National Economic Council director Larry Kudlow offered more detail on China’s purchase targets for each of the following sectors:
- Agriculture: $40 to $50 billion
- Manufacturing: $75 billion
- Energy: $50 billion
- Financial services: $40 billion
“Between the two great nations, nothing like this has ever happened before,” Kudlow told CNBC Wednesday. “This is such an important deal.”
The president’s economic adviser also told reporters that there will be an “enforcement mechanism” if China does not meet the targets.
Kudlow also said that China will make changes to its criminal and civil procedures to enforce issues of intellectual property theft and forced technology transfer, which have been a key point of contention for the U.S.
Any second phase of the deal depends on success of Phase One, Kudlow said. In the meantime, the U.S. will be keeping significant tariffs in place as a check on progress.
Former Vice President Joe Biden criticized the deal shortly before the president was set to sign it.
“China is the big winner of Trump’s ‘phase-one’ trade deal with Beijing,” Biden said in a statement. “True to form, Trump is getting precious little in return for the significant pain and uncertainty he has imposed on our economy, farmers, and workers. The deal won’t actually resolve the real issues at the heart of the dispute, including industrial subsidies, support for state-owned enterprises, cybertheft, and other predatory practices in trade and technology.”