China failing to meet new quotas on US imports

Imports and Exports | | MIC Customs Solutions |

A new report has suggested China is set to fall short of its commitment to increase US imports by $200 million by the end of the year.

China is failing to meet the terms of a 'phase one' deal agreed with the US to ease the impact of the trade war between the two nations, with imports to the Asian country falling short of previous pledges.

This is according to a new study by the Peterson Institute for International Economics, which found Beijing has purchased just 58 per cent of the US goods that would be needed to meet its commitments, the Financial Times reports.

Under the terms of a deal signed with the Trump administration, China agreed to increase its purchases of US goods and services by $200 billion compared with 2017 levels by the end of 2021.

However, by the end of December 2020, purchase commitments of US products covered by the trade deal amounted to $100 billion, compared with a prorated target of $173.1 billion, the Institute said.

This is likely to present a new challenge to the administration of president Joe Biden as it decides how much of Mr Trump's trade policy to keep in place, such as the imposition of tariffs on billions of dollars worth of Chinese imports.

So far, president Biden has indicated a return to multilateralism when it comes to tackling China - as opposed to Donald Trump's 'go it alone' policy - and is set to work more closely with European allies to develop a more coordinated approach to trade policy with Beijing.

Chad Bown, a fellow at the Peterson Institute, said the phase one deal was "always a political agreement", adding that president Biden's team should “de-emphasize the purchase commitments".