Several U.S. demands remain after the phase one trade deal signing with China on Wednesday, including Chinese subsidies of state-owned enterprises, the exports of fentanyl, and the issue of the Asian country's "cyber intrusions," and they will be addressed in the second phase of talks, White House trade adviser Peter Navarro said Thursday.
"We got strong protections for intellectual property which is worth about $300 (billion) to $500 billion a year if we can get that moving," Navarro told CNBC's "Squawk Box." "We got a good start on forced technology transfer. We've got a strong currency manipulation provision in there...and of course, we got financial market access which has been a white whale for the folks on Wall Street that you interact with every day, banks, credit card insurance companies."
However, the second phase will address other issues, including Chinese cyber intrusions into U.S. businesses.
“It’s just insane that Chinese government officials continue to hack into American businesses and steal trade secrets,” Navarro said. "It’s very destructive to our businesses.”
Meanwhile, the "seventh deadly sin" from China is the exports of the synthetic opioid fentanyl to the United States, said Navarro, as it "kills over 50,00 Americans a year."
President Donald Trump has called on Beijing to do more to prevent the highly addictive substance from coming into the United States, but China denies it is the origin point for the drug.
In the first phase of the deal, China says it will end the practice of forcing foreign companies to transfer technology to China's companies and will tighten intellectual property theft protections. Further, China agreed to buy an additional $200 billion in U.S. goods from the United States over the next two years. In exchange, the United States has canceled tariffs on Chinese-made smartphones, laptop computers, and toys, while cutting the rate levied on $120 billion in other Chinese imports to 7.5%. Other tariffs of 25% on $250 billion in Chinese industrial products and components will remain in place, but Trump said those tariffs will be removed if phase two of the deal is approved.
Navarro appeared shortly before the Senate voted 89-10 to approve the United States-Mexico-Canada agreement, another key Trump administration trade initiative.
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