China is still behind on buying enough U.S. goods to fulfill 'phase one' trade deal - CNBC

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Soybeans are harvested from a field on Hodgen Farm in Roachdale, Indiana, U.S. November 8, 2019.

Bryan Woolston | Reuters

BEIJING — As the trade deal between the U.S. and China runs into its second year, Chinese purchases are still running short of the agreed amount, according to the U.S.-based Peterson Institute for International Economics.

Both countries signed a phase one trade agreement in January 2020, just weeks before Covid-19 began to spread rapidly in China and subsequently turned into a global pandemic. The deal stipulated that relative to imports from the U.S. in 2017, China needed to buy at least $200 billion more in U.S. goods and services over the next two years.

To stay on track with the agreement, China would have needed buy $64.5 billion worth of U.S. goods during the first four months of this year, Peterson Institute senior fellow Chad P. Bown estimated in a report Tuesday, citing Chinese customs data.

However, the data showed China's purchases of U.S. goods reached only 73% of the year-to-date target as of April, the report said.

Based on U.S. data, the level of progress falls to 60%, the institute said.

By category, agriculture came the closest to reaching the year-to-date target, at 79% based on U.S. data and 87% based on Chinese data.

The two-year agreement is set to end in December. Chinese purchases of U.S. goods fell more than 40% short in 2020, according to the institute.

Talks between China and the U.S. on trade have stalled. Representatives from both countries were set to hold a six-month compliance review in August, but the meeting was postponed.

The two sides reached the phase one agreement after trade tensions escalated under former U.S. President Donald Trump, who sought to reduce the trade deficit with China. However, that trade gap has only increased amid the pandemic, which prompted more U.S. imports of face masks and other goods.

Since U.S. President Joe Biden took office in January, his administration has kept to Trump's tough stance on China with little indication of changes to tariffs or the trade agreement in the near future.

Katherine Tai, the new U.S. trade representative, said early this month she expected to meet her Chinese counterpart soon, according to the Financial Times.