Four months have passed since the United States and China signed the Phase One trade agreement. China has already followed through on several commitments, including liberalizing a range of agriculture policy restrictions, releasing policies according to its intellectual property (IP) commitments, and raising equity restrictions to give foreign companies new access to China’s financial markets. Some commitments—such as the delivery of China’s IP action plan—missed their deadlines enumerated in the agreement, but were ultimately delivered. Though US-China trade plummeted in the first quarter of 2020 as a result of the COVID-19 outbreak, it promises to pick back up again as China restarts its economic growth engine.
In this uncertain environment, the US-China Business Council (USCBC) asked our members a series of questions about Phase One implementation and the impact of COVID-19 on the agreement. This report is an update to our original findings released shortly after Phase One was signed. This iteration features responses from 38 USCBC member companies from a range of industries.
Emerging trends since February:
- Uncertainty about faithful implementation of the Phase One deal is driving a greater percentage of respondents to identify as neutral toward the deal.
- A plurality of respondents say that disruptions from COVID-19 are an obstacle to business opportunities created by Phase One.
- A larger portion of respondents answered that the costs of the Section 301 tariffs outweigh the benefits from the trade agreement.
- The majority of respondents affected by China’s retaliatory tariffs have secured some degree of tariff exclusion.
- Companies are still uncertain about leveraging Phase One’s dispute resolution mechanism.