Trump US China Trade

President Donald Trump gestures during a ceremony with Chinese Vice Premier Liu He to sign a U.S.-China trade agreement in the East Room of the White House Wednesday in Washington.

WASHINGTON (AP) — President Donald Trump signed a trade agreement Wednesday with China that is expected to boost exports from U.S. farmers and manufacturers and is aimed at lowering tensions in a long-running dispute between the economic powers.

The agreement is welcome news to leaders in agricultural organizations, including the National Potato Council, which predicts the terms will boost China from being a top 10 export market for U.S. spuds to a top five market.

The agreement is being described as “phase one” of a larger negotiation focusing on tensions in the U.S.-China trade relationship. Chinese leader Xi Jinping said in a letter to Trump that the first phase is “good for China, the U.S. and for the whole world.” The letter was read by Beijing’s chief negotiator, Vice Premier Liu He.

The U.S. potato industry comprises a total annual value of $3.7 billion and exports 20 percent of its overall crop to international markets, according to an NPC press release. With a combination of competitive tariffs and enhanced market access, China could become a top five market in the near future, NPC predicts.

“The U.S. potato industry welcomes the signing of this phase one agreement and hopes the agreement will bring new opportunities for the export of United States fresh and processed and potatoes to China,” said NPC President Larry Alsum.

Jared Balcom, NPC’s vice president of trade affairs, added, “This signing today, coming on the heels of the new Japan free trade agreement and the anticipated ratification of the USMCA, creates trade momentum for our industry and sets the stage for future increased market access that may result in substantial gains for U.S. growers.”

Trump said during a White House ceremony that the deal is “righting the wrongs of the past.” He promoted the signing as a way of delivering economic justice for American workers and said, “We mark a sea change in international trade” with the signing.

According to the Trump administration, China is to buy $40 billion a year in U.S. farm products — an ambitious goal for a country that has never imported more than $26 billion a year in U.S. agricultural products.

The agreement is intended to ease some U.S. economic sanctions on China while Beijing would step up purchases of American farm products and other goods. Trump cited beef, pork, poultry, seafood, rice and dairy products as examples.

The deal would lower tensions in a trade dispute that has slowed global growth, hurt American manufacturers and weighed on the Chinese economy. Trump said easing trade tensions was critical.

“Keeping these two giant and powerful nations together in harmony is so important for the world,” Trump said. “The world is watching today.”

White the deal stops short of many changes the president has sought from China, it leaves in place tariffs on about $360 billion in Chinese imports, leverage the administration hopes will generate future concessions.

U.S. Trade Representative Robert Lighthizer said work on follow-up negotiations will hinge on how China fulfills the commitments it made in the initial phase.

His Chinese counterpart said “the world is now at a critical historical crossroads” facing choices of how to promote country-to-country cooperation.

“Cooperation is the only right choice,’’ said Liu.

But this agreement would do little to force China to make the major economic changes such as reducing unfair subsidies for its own companies that the Trump administration sought when it started the trade war by imposing tariffs on Chinese imports in July 2018.

Most analysts say any meaningful resolution of the main U.S. allegation — that Beijing uses predatory tactics in its drive to supplant America’s technological supremacy — could require years of contentious talks. Skeptics say a satisfactory resolution may be next to impossible given China’s ambitions to become the global leader in such advanced technologies as driverless cars and artificial intelligence.

The thornier issues are expected to be taken up in future rounds of negotiations. But few observers expect much progress before the U.S. presidential election in November.

The U.S. has dropped plans to impose tariffs on an additional $160 billion in Chinese imports, and it cut in half, to 7.5%, existing tariffs on $110 billion of good from China.

—The Farm & Ranch staff contributed to this report.