The United States has negotiated the first phase of a trade agreement with China, which could be signed just this week, according to Peter Navarro, the top China-US trade adviser. relationships within the White House. The new agreement will terminate the new tariffs on Chinese imports, as well as reduce some of the existing prices that have affected the prices of consumer goods and other products.
The new trade deal was announced on December 13 before the holiday break and revealed that China has promised to buy more agricultural products from the United States. Other industries that are the subject of a trade agreement are technology, where China has apparently agreed to further strengthen its intellectual property rights (possibly) to reduce counterfeit goods originating in the country of heavy production.
Although the 86-page trade agreement has not been released to the public, it looks likely to be published after its signature later this week. President Donald Trump has said there will be a formal meeting for both himself and Chinese President Xi Jinping to sign the document in the new year. The arrival of a trade agreement is a step in the right direction after a long battle between the two countries.
The trade war in recent months
The trade war has, in recent years, created financial turmoil and uncertainty for both the United States and China, as companies worry about whether retail prices will rise gradually because of the constant threat of rising tariffs.
In September, Apple narrowly missed a huge increase in consumer goods tariffs in time for the release of the new iPhone, after President Trump threatened to increase consumer goods tariffs entering the United States via China.
Eventually the tariff increase was put on hold and Apple managed to keep the price of the new iPhone at a price similar to the 2018 version. For thousands of US retailers, the increase in tariffs in the third quarter would be detrimental to consumer markets shortly. before the holiday season, which increased in part due to late billing.
But China is not the only country to see trade retaliation due to political disputes (much of the conflict between the United States and China is due to the fact that Huawei, CFO Meg Wanzhou was arrested in Canada in 2018 for allegations of illegality. trade of American goods with Iran).
President Trump said in early December that the United States would increase tariffs on goods imported from France (which include mainly wines, cheeses and luxury beauty products, so Melania probably feels the bulk of it). The tariff threat is in line with French President Emanuel Macron’s decision to potentially impose digital tax on tech giants like Google. The move will bring in hundreds of millions of euros annually.
Will relations with China be exhausted by new agreement?
The arrival of a first-phase trade deal with China could smooth things out after years of conflict, but economists worry that the move is more of a “halt” to current tensions than a real longevity deal. Many are concerned that removing existing tariffs would not be enough to stimulate the economy, as it will allow GDP to maintain the growth needed to sustain the economy.
Given the damage already caused by the trade war, a small victory is unlikely to be enough to overcome things.