President Donald Trump and Chinese Vice Premier Liu He signed the Phase One trade deal on Wednesday during a ceremony at the White House.
Trump said the deal will result in China greatly expanding imports from the U.S.
"This increase will make important progress in rebalancing the United States-China trade relationship," said a statement from the White House. "As a part of the new agreement, China has pledged to increase imports of American goods and services by at least $200 billion. China's increase in United States imports will take place over the next 2 years, and the trajectory is expected to continue even after 2021."
Trump said China has made commitments to purchase more than $200 billion in U.S. goods. That includes $50 billion in farm products, $75 billion in manufactured goods, $50 billion in energy commodities and $40 billion to $50 billion in services, including financial services.
The deal also has strong and enforceable agreements in the areas of forced technology transfer and intellectual property theft, he added.
"Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade," Trump said. "Together we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families.
"We've made a great deal and China fully understands there has to be a certain reciprocity."
Trump said unfair trade with China was "probably the biggest reason why I ran for president."
Since China joined the World Trade Organization, the U.S. was "easy pickings" and had "racked up nearly $5 trillion ... in trade deficits, lost millions and millions of manufacturing jobs, and saw tens of thousands factories closed," Trump said, though he attributed some of those lost jobs and the growing trade deficit to the North American Free Trade Agreement with Mexico and Canada.
Trump contended the deal would strengthen world peace.
"We now have a big investment in each other," he said.
The two countries will start negotiating Phase Two of a trade agreement "as soon as this kicks in," Trump said. He said 25% tariffs on $250 billion of Chinese goods will remain in place and that 10% tariffs on $300 billion of goods will be reduced to 7.5% as Phase Two negotiations take place.
"I'm leaving them on because otherwise we have no cards to negotiate with," the president said. "But they will all come off as soon as we finish Phase Two."
Trade organizations praised the agreement but said work remains to be done.
"Today's signing is an important step in giving America's farmers and ranchers the ability to get back to business in the global market," said American Farm Bureau Federation President Zippy Duvall.
"China was once the largest market for U.S. agricultural products but has dropped to fifth largest since retaliatory tariffs were introduced. This agreement will help turn around two years of declining agricultural exports. The potential of tens of billions more in exports is welcome news for farmers who are eager to compete on a more level playing field," he said.
Jay Timmons, president and CEO of the National Association of Manufacturers, said "no other administration has achieved this level of success with — and accountability of — America's primary economic adversary in the past three decades."
"NRF strongly supports the administration's efforts to address China's unfair trading practices, but we hope this is the first step toward eliminating all of the tariffs imposed over the past two years," said Matthew Shay, president of the National Retail Federation. "The trade war won't be over until all of these tariffs are gone. We are glad to see the Phase One deal signed, and resolution of Phase Two can't come soon enough."
"While this agreement offers some relief, retailers ultimately want a long-term deal that rolls back all tariffs and provides the kind of certainty and predictability needed to plan and invest while operating in a global economy," said Blake Harden, vice president, international trade, at the Retail IndustryLeaders Association. "Leading retailers urge the administration to conclude the Phase Two negotiations quickly to get us to that goal."
"For both sides, this is a pro-growth deal," said Larry Kudlow, the national economic council director, in an interview on CNBC. He said the deal could add 0.5% to U.S. economic growth in 2020 and 2021.
"Between the two great nations, nothing like this has ever happened before," Kudlow said. "It shows cooperation is possible. It shows a more balanced trading relationship is possible."
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