On Wednesday, after almost 2 years of a “trade war”, the US and China have signed a trade truce. China pledged to to boost its purchases of US goods and services by $200 Billion. This would be the largest increase in US trade with China since China joined the World Trade Organization in 2001.
That includes $32 billion in additional agricultural purchases, $78 billion in manufactured goods, $52 billion in energy products, and $38 billion in additional U.S. services.
“We’re delighted that the Chinese consumers will now enjoy the greater access to the best products on earth: those made, grown and raised right here in the USA,” Trump said.
“Today, we take a momentous step, one that’s never taken before with China,” that will ensure “fair and reciprocal trade,” Trump said at the White House signing ceremony. “Together, we are righting the wrongs of the past.” “We mark more than just an agreement. We mark a sea change in international trade,” Trump said. “At long last, Americans have a government that puts them first.”
“This is a big win for the president,” Treasury Secretary Steven Mnuchin told Fox News, while conceding the “Phase 1” agreement does not achieve all of the reforms the administration initially sought.
This is a in fact a HUGE victory for President Trump. Although it’s still the “phase one” agreement, China already pledged to spend more than $200 billion on US manufacturers, farmers and services. As Secretary Steven Mnunchin said, even if there won’t come a “phase two” deal with China, it’s still a big win for the US.
“It’s not everything,” he acknowledged. “There will be a ‘Phase 2.’ But this is the first time we’ve had a comprehensive agreement with China.”
After announcing the deal on December 13, the United States canceled a damaging round of new tariffs that were due to kick in two days later. In August, President Trump accused China of manipulating its currency to gain an advantage in trade and offset the impact of the tariffs. He removed that label earlier this week. The deal also restores a twice-yearly dialogue process that previous administrations conducted regularly but that Trump scrapped.
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