Now, attention is turning to high-level trade talks scheduled for Saturday between China and the U.S.
Some traders are sitting on the sidelines ahead of an August 15 meeting between Chinese and US officials to assess the implementation of the first phase of the trade agreement, according to several media reports.
The move comes as an expert said on Friday that China may never reach the amount of US goods and services it has agreed to buy under the first phase of the agreement.
China and the United States signed the agreement in January, putting a halt to a trade war between the two countries. It comes after the two countries imposed retaliatory tariffs on hundreds of billions of dollars worth of goods.
Under the agreement, China pledged to buy at least $200 billion more in the next two years, on top of its purchases of U.S. goods and services in 2017.
But so far, says Scott Kennedy, senior adviser on Chinese business and economic affairs and chairman of the Board at the Center for Strategic and International Studies, China has not done so.
He told CNBC’s Squawk Box Asia: “If they really build on the commitments they signed up to in January, China is way behind and will never get there.”
Data compiled by the Peterson Institute for International Economics shows that in the first half of 2020, China bought less than a quarter of the us goods targeted for the year under the trade agreement.
PIIE said the data does not include U.S. services purchased by China because they are not published on a monthly basis.
Senior trade negotiators from the two countries will reportedly hold a video conference this week to review progress in implementing the first phase of the agreement.
The meeting comes as relations between China and the United States have deteriorated in recent months. Their differences now cover broader issues, including the origins of the coronavirus, Hong Kong’s autonomy and national security concerns surrounding Chinese tech companies.
U.S. President Donald Trump has hinted at broader issues related to u.s.-China relations. He said earlier this week that the first phase of the trade deal “doesn’t add much to the overall situation.”
Kennedy said the dispute between the United States and China has shifted from a trade imbalance to a “fundamental strategic competition,” with both countries “painting each other as an existential threat.”
However, he said the White House would not “walk away” from the deal because “the President needs a second term and that’s the only reason the Chinese are buying produce from farmers in red states”.
The move came after Senior White House economic adviser Larry Kudlow said on Thursday that the Trump administration was pleased with the pace at which China was making good on the trade deal and buying American goods.
“China is definitely importing more of our goods at the moment. And by the way, that would be a huge boost to American agriculture.” Speaking to reporters, Kudlow quoted U.S. Trade Representative Robert Lighthizer as briefing President Trump.
Kudlow also noted that “Mr. Lighthizer told Mr. Trump that China now buys more than 40 percent of U.S. exports, compared with 20 percent in 2017.”
Kudlow added, “While we have significant differences with China on other issues, we are working on the first phase of the trade agreement.”
The US Department of Agriculture announced on Thursday that Chinese buyers had signed contracts to buy 197,000 tonnes of US soybeans, the seventh consecutive working day for the US government to report selling soybeans to China, the world’s largest soybean buyer. In a separate report, the USDA said soybean export sales totaled 2.13 million tons in the week ended Aug. 6, the most since November 2016.