Significant: End of trade war between the two largest economies in the world • Trump tweeted after signing base for US-China trade agreement: "Amazing deal" • Markets have responded to increases, which have been slowing down
US President Trump and Chinese President Jinping // Photo: AFP
The US and China have concluded: The end of the trade war, at least for now. On Friday, the world's two largest economies announced the signing of the first phase of the trade agreement, which is expected to end a 17-month mutual economic attrition.
The essence of the deal: US tariff relief for a significant increase in US product purchases, including in agriculture, from the Chinese. The deal is expected to be officially signed in the first week of January. "This is an amazing deal," President Trump tweeted in his Twitter account on Friday.
As a result of the agreement, a $ 160 billion tariff increase on Chinese goods worth $ 160 billion, scheduled to take effect today, was canceled. In addition, Trump cut half of the existing tariff rate to 7.5% on $ 120 billion worth of goods, but left 25% on $ 250 billion worth of goods. At the same time, the Chinese have pledged to buy US services and goods totaling $ 200 billion over the next two years. The acquisitions will focus on four sectors: manufacturing, energy, agriculture and services.
US President Donald Trump // Photo: Reuters
US Commerce Commissioner Robert Lightizer said the Chinese had pledged to purchase US $ 32 billion worth of agricultural products over the next two years, adding to a $ 24 billion-a-year base since 2017 - meaning a 66% increase in China's volume. The list of products will not be disclosed to the public, but Lightiser made it clear that the agreement is in compliance with WTO rules. "The Chinese will be free to decide which products to buy at the best time for them, and in accordance with their interests."
The US Commerce Commissioner said he does not expect any additional tariffs on the part of the US, and that the Chinese have also agreed to a series of White House requirements in intellectual property, including the cessation of pressure on US companies operating in China to hand over their technologies to Beijing. Trump announced that after the U.S. holidays, he expects to resume negotiations on more issues so that the next steps in the deal are signed before the November 2020 presidential election.
New York markets initially reacted with great enthusiasm to the announcement of the deal, but that subsided until the end of trading on Friday, presumably due to the realization that this was a partial agreement and that a significant portion of the tariffs remained intact. US experts estimate that if the trade war does come to an end, a steep rise in the various indices in the coming civilian year is expected