Treasury Secretary Steven Mnuchin said Tuesday that China was following through on its trade deal promises despite fears that the coronavirus pandemic could change China’s spending behavior.
“We have every expectation that they will support and live up to the ‘Phase 1’ agreement, and they are well on their way for those commitments,” Mnuchin said during a House hearing on the Treasury’s response to the pandemic.
President Trump in January signed “Phase 1” of a trade deal with Beijing, giving the president a partial victory on one of the main economic policy efforts of his administration. China is expected to purchase more than $200 billion in U.S. goods and services as part of the deal.
“I think the reason the deal is gonna hold for the time being is that China’s actually doing a good job at implementation,” Clete Willems, a former deputy director at the National Economic Council, told CNBC last week.
Although China’s purchases of American goods and products have increased in the last month as the economy has improved from the coronavirus shutdowns, the imports are significantly behind the speed needed to fulfill the statutes of the trade deal.
According to a Bloomberg report based on Customs Administration data, China has only bought approximately 19% of the total purchase target of more than $170 billion for goods in 2020. This means China needs to buy almost $139 billion worth of goods during the rest of the year to meet the terms of the agreement signed in January.