On Friday, the United States and China officially announced that they reached a phase one trade agreement, and it consists of some tariff relief, escalation of agricultural purchases, as well as a structural change to the intellectual property along with technology issues. Some particulars of the partial deal, which the largest economies of the world will now move toward signing as their intention to rein in a continuous trade war, appeared murky.
As officials of China briefed the news reporters about the details of the accord on Friday morning, the United States President Trump also announced conditions of what he termed as an amazing agreement. Main stock indexes of the United States initially soared following news of the trade agreement but, after some time, gave up those gains. Wang Shouwen, Vice Commerce Minister, said that the United States has plans to slap duties on Chinese goods in phases, precedence for Beijing. However, Wang didn’t share any details about exactly when the United States would remove tariffs.
Later, Trump stated that his administration might revoke its next round of duties on Chinese goods set to take effect on Sunday. In his tweets, he said that the White House might leave twenty-five percent tariffs on around $250 billion in imports in place, whereas removing existing tariffs on another $120 billion in goods to around 7.5%. According to Liao Min, the Vice Finance Minister, China will also consider revoking retaliatory duties set for Sunday.
China will increase w.r.t Phase-one Trade Accord
Han Jun, the Vice Minister of Agricultural & Rural Affairs, said that China would escalate Agri purchases significantly, yet he didn’t specify by how much. Moreover, the American President insisted that China acquired more U.S. crops as part of the agreement and praised the promise in his tweets. Both economic rivals said they would take steps to make changes associated with intellectual property, financial services, and technology transfers. Frequently, the White House said it wants to deal with those issues as Donald Trump emphasizes to crack down on what he named trade abuses of China.
The trade deal still required legal procedures as Beijing and Washington proceed toward setting a time for inking it. Robert Lighthizer, the Trade representative of the United States, said while speaking to the reporters on Friday that China and the United States intended to sign the deal in Jan in Washington. He added, the administration of Trump hasn’t promised to remove tariffs in the future. Though, he said the United States would not slap new tariffs on the condition China negotiates in good faith.
Trump said that the United States would start negotiations on the trade deal’s next phase instantly, instead of waiting until after the U.S. 2020 Presidential Election. Previously, Trump suggested that he could wait until after the 2020 election to strike a deal, and after that, investors got worried. He said while talking to reporters in the White House that he would use the existing duties as a tool of negotiation in future discussions. He added, he assumes that China will start purchasing $50 billion in United States Agri goods “pretty soon.”
U.S. and China Finally reached a Trade Deal
The two main economies of the world finally knotted to patch up a partial trade accord announced in October 2019. Beijing and Washington announced a deal following numerous differences and wrong starts during trade negotiations in an approximately two-year trade war. The U.S. president used duties to pressurize Beijing as he pushes for a wider agreement to deal with intellectual property theft, a massive trade deficit, and forced technology transfers.
In a statement, Lighthizer said that Donald Trump focused on finalizing a phase-one trade deal that attains fully-enforceable, meaningful structural changes and starts rebalancing the United States-China trade relationship. The fifteen percent tariff on around $160 billion in Chinese products that the planning of White House to cancel tariffs would affect consumer goods, including clothing, toys, and phones.