Alabama Commerce Secretary Greg Canfield is attending the ceremonial signing of the Phase 1 trade deal between the United States and China at the White House in Washington today.
President Donald Trump is signing an 86-page agreement with Chinese Vice Premier Liu He that includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in coming years.
Canfield is among a limited number of U.S. business and government leaders invited to the historic ceremony, which marks a cooling in trade tensions between the world’s two largest economic powers.
“I believe this is a positive step by the Trump Administration. It begins a process to establish a framework from which to create a pathway to more normalized trade on a fair basis between these two nations,” Canfield said.
“China has historically been a Top 3 destination for Alabama exports, so this represents an important step for many companies in our state that do business on a global scale.”
In December, the Office of the United States Trade Representative (USTR) announced that the U.S. and China had reached an agreement that requires structural reforms and other changes to China’s economic and trade policies in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.
According to the USTR, China has agreed to increase its total purchases of U.S. goods and services by at least $200 billion over the next two years.
Also included is a commitment by China to increase its buying of U.S. agricultural products to $40 billion to $50 billion in each of the next two years.
Canfield said the Phase 1 trade deal contains positives for Alabama.
For one thing, an easing of trade tensions is good news for the Port of Mobile, Alabama’s only deep-water seaport and the international gateway for the state’s economy.
In addition, Alabama farmers stand to benefit from the trade deal. In 2016, Alabama exports of soybeans and peanuts to China approached $285 million, according to data from the Alabama Department of Commerce. In 2018, those shipments dropped to $20 million.
In November 2019, Alabama exports of soybeans and peanuts equaled zero, figures show.
Overall, Alabama exports to China have taken a tumble since the trade war began. Through the first 11 months of 2019, these shipments dropped more than 30% compared to the same period in the previous year, data indicate.
Shipments of Alabama-made vehicles to China fell sharply, down nearly 32% in the 11-month period. Alabama is the nation’s No. 3 auto-exporting state.
The United States first imposed tariffs on imports from China based on the findings of the Section 301 investigation on China’s acts, policies and practices related to technology transfer, intellectual property and innovation, according to the USTR.
This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.