US, China Officials Say Phase 1 Trade Deal Still On

Top US and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal and discussed how to increase lagging Chinese purchases of American goods, lending support to financial markets on Tuesday.

The pledge was made in a telephone call between US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He - their first formal dialogue since early May - amid concern the deal could be on shaky ground because of worsening US-China ties.

"Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement," the US Trade Representative's office (USTR) said in a statement after what it described as a regularly scheduled call.

The call was originally expected on August 15, the six-month anniversary of the deal's launch, but was delayed by President Donald Trump, who had told reporters he was still angry at Beijing over the coronavirus pandemic.

With Trump's Republicans holding their political convention this week, top Trump aides have sought to put a positive spin on the trade deal, saying in recent days they were satisfied with China's implementation as purchases of US farm goods ramp up from a slow start that has put Beijing well behind initial targets.

White House trade adviser Peter Navarro, a vocal China hawk, told reporters on Tuesday the trade deal was "alive and well. They're buying the corn, the soybeans, the pork, the beef that they said they would."

Tensions between Washington and Beijing have grown over the coronavirus and issues ranging from a new national security law imposed on Hong Kong to US sanctions against Chinese tech firms accused of threatening US national security.

China's commerce ministry confirmed the two sides had a "constructive dialogue" and agreed to continue pushing forward the implementation of the Phase 1 trade deal.

The USTR said they "addressed steps that China has taken to effectuate structural changes" on issues including protecting intellectual property rights, removing impediments for US firms in the financial services and agriculture sectors and eliminating forced technology transfers.

"The parties also discussed the significant increases in purchases of US products by China as well as future actions needed to implement the agreement," it said. (Reuters)