The United States and China have reached an initial trade agreement today, curtailing a 19-month rift between the world’s two largest economies.
The Phase One deal, described as “an historic and enforceable agreement”, will see structural reforms and other changes to China’s economic and trade regime, according to a statement by the Office of the United States Trade Representative.
Among the areas to be affected are intellectual property, technology transfer, agriculture and financial services, among others.
“Today’s announcement of a Phase One agreement with China is another significant step forward in advancing President Trump’s economic agenda.”– US Secretary of the Treasury, Steven Mnuchin
For the United States’ part, the agreement will see the North American country maintain its 25 per cent trafiff on US$250 billion worth of Chinese imports, but a 15 per cent tariff placed on Chinese products in September was halved.
In a tweet following the agreement, Trump said “This is an amazing deal for all” after noting that the planned tariff of 15 per cent on US$120 billion worth of Chinese good would not take effect on Sunday as planned, with the finalisation of the deal. He also said his administration would begin work immediately on Phase Two of the deal, rather than wait until after next year’s constitutional general elections, as he threatened previously.
Secretary of the Treasury Steven Mnuchin, in the Trade Office statement, said “Today’s announcement of a Phase One agreement with China is another significant step forward in advancing President Trump’s economic agenda. Thanks to the President’s leadership, this landmark agreement marks critical progress toward a more balanced trade relationship and a more level playing field for American workers and companies.”
In past, Trump has said that China would commit to purchasing US$50 billion worth of American farm goods under a trade agreement. No such announcement was made today as the Trade Office said “China will make substantial additional purchases of US goods and services in coming years.”
The Chinese announcement of the deal was just as reserved as the nation’s Vice Minister of Commerce, Wang Shouwen, said “The Chinese side believes that as the top two economies of the world, China and the United States should bear in mind the larger interests in managing their economic and trade relations. Reaching the economic and trade agreement services the fundamental interests of our two peoples and people all over the world.”