https://theconservativetreehouse.com/2020/08/25/premier-liu-he-and-ustr-lighthizer-discuss-renewed-phase-1-deliverables/#more-198385
Premier Liu He and USTR Lighthizer Discuss Renewed Phase-1 Deliverables…
Posted on August 25, 2020 by sundance
This is interesting timing. In the foreground President Trump has openly stated he was/is not seeking further trade discussions with China. However, in the background if China does not meet the $75 billion phase-1 purchases, then a set of automatically triggering tariffs kick-in…. so it is in China’s interest to engage.
This trade leverage, combined with President Trump’s willingness to completely decouple from China…. combined with tariffs against China being favored by President Trump… explains the position of the administration. Do nothing and tariffs kick back in.
According to Reuters analytics China has only purchased $7.3 billion in agricultural products through the first half of the year. The phase-1 agreement (tariff avoidance) requires $36.5 billion in purchases for 2020.
Additionally, in the energy sector: “China bought only 5% of the targeted $25.3 billion in energy products from the United States in the first half of 2020. Chinese state-owned oil firms have booked tankers to carry at least 20 million barrels of U.S. crude for August and September.” [Reuters Link] Again, if China doesn’t meet the agreement threshold the suspended tariffs return in full force.
It looks like Vice-Premier Liu He is attempting to head-off the re-institution of tariffs due to phase-1 purchases falling below the agreement; thus Beijing is trying to avoid the built-in tariff penalty aspect.