Source: Ukragroconsult (Ukraine)
US China Trade Agreement: A Phase One Deal
The US has officially signed a trade agreement with China, marking a significant step. This Phase One deal was signed on January 15, 2020. This agreement aims to de-escalate the ongoing trade war tensions. Furthermore, China commits to purchasing an additional $200 billion in U.S. goods and services over two years. This includes agricultural products, manufactured goods, energy resources, and various services.
China pledged to increase its purchases of U.S. agricultural goods. For example, they will buy $32 billion more over the next two years. These purchases include soybeans, corn, wheat, and other key commodities. Moreover, the US China Trade Agreement addresses critical areas such as intellectual property protection. Also, it covers currency manipulation and market access improvements.
Tariffs and Unresolved Issues
Tariffs, however, remain in effect for many goods. The U.S. continues to hold tariffs on approximately $360 billion worth of Chinese imports. Simultaneously, China maintains tariffs on over $100 billion of U.S. goods. Therefore, analysts see this agreement as a partial solution. Many underlying issues remain unresolved, however. Additionally, the COVID-19 pandemic has introduced further complications into the trade dynamic. Consequently, the future remains uncertain for the trade ties between the two major economic powers.
The deal represents a notable initial step. However, the long-term impact remains to be completely seen. Several elements might impact the US China Trade Agreement and the trade relations overall. Many factors could influence the future trade relationship between US and China. Therefore, we must wait for it to play out in the years to come.