Last Friday, the United States President Donald Trump started talking about the first phase of their deal with China in an attempt to stop deal wars. Trump also put a halt on the increased tariff threat this month. Unfortunately, people from both U.S and China see this deal as a work in progress before both parties can agree without debate.
The deal aims to cover different issues such as agriculture, money, as well as the protection of intellectual properties. The attempt to seal a pact is the first significant step for both countries ever since the tariff hike happened a few months before. The increase resulted in slow economic growth worldwide and put the markets in a challenging and pressured situation.
Although Trump’s declaration last Friday was short of details, he thinks that the completion of an agreement would most likely take weeks. In line with this, the president did not dismiss the thought of the plan possibly failing, although he felt confident about it overall.
The United States Treasury Secretary Steven Mnuchin stated that the output should involve more work. Adding that no one signs any agreement unless the president knows it’s on paper. Although both the U.S and China have a basic understanding of the whole situation, Mnuchin thinks there should be additional effort and measures taken before making anything official.
At the White House, two days after engaging in different negotiations, President Trump sits across the Chinese Vice Premier Liu in the Oval Office. The U.S President openly stated that both parties are nearing the end of the feud, describing the relationship as a “lovefest.”
On the other hand, the Vice Premier set a different mood despite the president’s statement. Liu says that they are happy they accomplished considerable advancements in various areas, and they plan to continue what has started.
Xinhua, China’s state-owned news channel, reported that the United States and China see each other eye to eye. Both countries will further improve relations until they reach a substantial accord.
According to People’s Daily, China described the conversation with the president as encouraging, candid, and very productive. Liu also stated that both parties are working for a better resolve, adding that an agreement cannot ensue if there is continuous pressure on China along the way.
President Donald Trump was quick to exhibit his support to the local farmers by announcing China’s agreement to purchase as much as fifty billion dollars worth of agricultural items. All the while, he still had billions of dollars worth of tariffs on products from China.
Some view the sudden announcement as a progressive move, but not everyone sees it that way. Scott Kennedy is a China trade expert working for the Center for Strategic and International Studies in Washington, and he thinks that what the president did was unjustified. Kennedy further states that if both sides aren’t on the same page yet, then they must be far from reaching an agreement. He says that this deal “isn’t skinny. It’s an invisible one.”
According to Mnuchin, the U.S president did not continue his initial plan of increasing tariffs. Initially, it was supposed to happen on Tuesday, going from 25% to 30% on two hundred fifty billion worth of Chinese products. U.S Trade Representative Robert Lighthizer added that the decision regarding tariffs had not been finalized by Trump, even if it was supposed to happen this coming December.
President Donald Trump sees the meetings as a chance to improve deals that are beyond the tariff issues.
Gradual Advancements Eventually Happen
The two wealthiest countries in the world have shown progress in the past regarding their trade wars. This agreement happened even without a signed deal. That’s why last May, officials from the U.S side say that China refused to come to terms with a pact that could have been successful. They implied that China refuses to alter its laws, which would ultimately seal their compliance.
The U.S president has previously stated that an incomplete agreement would not suffice regarding his plans about the trade feud with China. The statement also applies to the deals about intellectual property, as well as policies for industrial development, which affects numerous jobs in the U.S.
Overall, Trump describes an approach that includes phasing, which he thinks is perfect for the current situation.
Stocks in the United States had a greater than 1% value last Friday plus a 1.09% S&P 500 SPX. These numbers arise after an earlier result of 1.7% ensued in hopes of sealing a deal.
A summit of the Asia Pacific Economic Cooperation on November 16 ensures a meetup between Trump and the president of China, Xi Jinping. Trump hints of a possible deal on paper while in Santiago, Chile.
Along the way, China has also reciprocated the United States’ efforts. The country presented with a schedule that showed when authorities would remove limitations on foreign ownership as well as mutual fund companies. This action is the first time China has allowed access to outside countries, which is part of the U.S agreement. In addition to this, Beijing stated that they would eventually come to terms with the openness of the country.
Last Thursday, China bought 142, 172 tonnes of U.S pork, making this transaction the most massive sale made in a week on the world’s top pork market. This report is confirmed and released by the U.S. Department of Agriculture.
Trump stated that China made a deal to buy U.S. products worth forty to fifty billion dollars. Mnuchin supported this statement by adding that these transactions would eventually reach the said amount in over a year.
Regarding the proposal on intellectual properties, the deal should focus on the following improvements under IP protections:
On the other hand, the agreement did not cover the following under transferring issues in technology:
- Data flow
- Review of product standards
- A system that aids in the evaluation of a company’s performance
President Trump said that the deal isn’t finished yet, as they would talk about other IP concerns in the next phase. These phases will eventually continue once the U.S. and China both finalize a deal in the first phase.
In support of everything, Liang Haiming of Hongkong describes the whole deal as “anesthetic” and “not an antidote.”