Trump Administration’s 2019 Trade Deal with China: A Look Back at the ‘Phase One’ Agreement

In a significant development during his presidency, Donald Trump announced in late 2019 that the United States and China had signed a trade agreement. While details were initially scarce, the then-President stated the deal was finalized, with Commerce Secretary Howard Lutnick (reported in the source as Lutnick, though Wilbur Ross served as Commerce Secretary during this period) confirming it was ‘signed and sealed’ days prior.

This agreement, often referred to as a ‘Phase One’ deal, followed months of intense negotiations and a trade war marked by escalating tariffs. Reports from the time indicated the pact aimed to formalize a framework established in earlier talks in Geneva and London, with a focus on issues like rare earth minerals and agricultural purchases, and a commitment to scale back some punitive tariffs.

A key point of contention during the negotiations was China’s export controls on rare earth minerals, vital for high-tech industries. The Chinese Commerce Ministry acknowledged ‘further confirmed details of the framework’ and indicated a willingness to approve export applications for controlled items, expecting the U.S. to reciprocate by lifting restrictive measures. Another area of focus was China’s efforts on the fentanyl issue, with the Trump administration pushing for more action against precursor chemicals.

The trade tensions and subsequent agreements had a tangible impact on both economies. The U.S. economy experienced contraction in early 2019, partly due to companies rushing to import goods before new tariffs. Similarly, China’s factory profits saw significant declines, particularly in sectors like automotive. This period marked a volatile chapter in U.S.-China economic relations, with the Trump administration frequently signaling intentions for further trade deals with various countries.

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