Tags: kudlow | trade deal | china | u.s.

Kudlow: US-China Phase One Signing Kicks off Phase Two Work

(Evan Vucci/AP)

By    |   Wednesday, 15 January 2020 11:05 AM

President Donald Trump is set to sign off on phase one of the massive U.S.-China trade deal, and negotiators will immediately start looking ahead to the second phase of an agreement, White House economic adviser Larry Kudlow said Wednesday. 

That means, among other things, that the United States will sell China a "ton of goods and services" with an overall ballpark figure of $200 billion in each of the next two years, Kudlow told Fox News' "America's Newsroom."

"We are the most competitive economy in the world," Kudlow said. "This is a one-time, historic, never-happened-before trade deal. It's going to benefit incomes, individual areas, ag and manufacturing, and financial services and technology and it's going to help our economy grow faster."

In the first phase of the deal, China has agreed to increase its total purchases of U.S. goods and services by at least $200 billion over the next two years. The deal also includes a commitment by China to increase its buying of U.S. agricultural products to $40 billion to 50 billion in each of the next two years. 

Kudlow said that at the White House, "we reckon in 2020 and 2021, at least a half a point of additional GDP, which will probably translate into, what, another million jobs on top of what we've already got?"

The "biggest hill" was to get through the first phase of the deal, and now negotiators will "move into phase two immediately," said Kudlow.  

"The president will be speaking today with the vice president and others to announce that," said Kudlow. "The toughest nut to crack in phase two will be to level the playing field and take care of unfair practices, regarding forced transfers of technology. IP theft."

Phase one of the deal has strong changes when it comes to the theft of intellectual property, said Kudlow, including changing Chinese criminal penalties.

"That will still leave us, however, with issues on whether the government gives licenses to American companies without trying to steal our technology or forcing technology transfers," said Kudlow. "The licensing and subsidies will come in phase two. And the unlawful forced transfer of technology. That will be tough."

Meanwhile, negotiators "got almost half" of what was asked for in phase one of the deal, said Kudlow, but that doesn't mean a loss to China. 

"The numbers are clear," said Kudlow. "You've got $40 billion to $50 billion increase in farming per year. Manufacturing, we haven't given enough credit to that. $75 billion in additional American exports will be imported by China. Services, $40 billion. A lot of that is financial. And that energy, we are the strongest energy power in the world today. As the president said, we don't need Middle East oil. China needs our natural gas, they need our LNG, they need our coal. [There will be] $50 billion of energy exports."

China needs the deal, he added, as its economy has been "very soft" and U.S. tariffs have hurt it "enormously."

"They need it, they want the American goods and services to help Chinese economy and the Chinese consumer," said Kudlow. "In that issue of 40% to 50%, no, we didn't lose. We didn't complete it. In other words, we got through probably — and ballpark numbers, we got through about half of what we wanted. Which is half more than anybody thought a year ago."

Kudlow also appeared on CNBC, where he described the deal as an important matter that shows the leadership of people like Trump, Ambassador Robert Lighthizer, and Treasury Secretary Steven Mnuchin, and that "America is ready."

"We are so competitive in this country with productivity," he said. "It just shows you, if you give us an open door, OK, lower trade barriers, let us sell you our great goods, services, manufacturing, energy, we will take that opportunity."

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Politics
President Donald Trump is set to sign off on phase one of the massive U.S.-China trade deal, and negotiators will immediately start looking ahead to the second phase of an agreement, White House economic adviser Larry Kudlow said Wednesday. 
kudlow, trade deal, china, u.s.
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2020-05-15
Wednesday, 15 January 2020 11:05 AM
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