US President Donald Trump participated in the signing of Phase 1 of the US-China trade deal on Wednesday but said that the tariffs on billions of dollars of Chinese goods will “just” remain until the signing of Phase 2 of the deal.
He said the deal will bring “harmony, prosperity, commerce and much more between the US and China”, and “lead to even stronger world peace.”
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This deal has been signed after months of rigorous negotiations and fine combing of all details. The two sides have been involved in an economic deadlock for the last 18 months.
Here are some of the salient features of the phase 1 deal:
1. The new deal halves the tariffs on Chinese goods worth more than US $120 billion. However, tariffs on other goods worth US $360 billion will remain in place.
2. China has agreed to purchase US agricultural goods worth an additional US $200 billion over the next two years. This will be with reference to the US $186 billion worth of agricultural goods and services purchased in 2017. President Trump called it a historic step to safeguard the interests of the American farmers. This will include the additional US $50 billion order in agricultural products and services.
3. China will purchase $40-50 billion in additional services, $75 billion more in manufactured goods and $50 billion worth of energy supplies.
4. The deal is being seen in a not so positive manner and financial analysts are waiting for the second phase of the deal which will bring more clarity to the economic relations between the two economic super powers of the world.
5. However, some have claimed that this partial rollback of tariffs will do little to get back the confidence in global trade and improve the situation.
According to various reports such as the World economic outlook prepared by the International Monetary Fund, global trade estimates for the year 2019-20 was seeing a sluggish growth. The outcome of this deal is yet to be seen in the coming days.