The agreement also delays the introduction of a 15% tariff on Chinese imports worth $156 billion, mainly consumer goods such as toys, clothing and electronics, which were due to come into force on Sunday. This trade war, followed zealously by Donald Trump, has undeniably its imprint, but few expect this conflict to go away with him, or even on the basis of any first-phase agreement. All these obstacles and complications lead to political failure. Regardless of who is president, the United States must get China to liberalize its tariffs, reduce non-tariff barriers, and streamline its subsidies and other practices that distort economic incentives. In response to Trump`s trade war, China imposed additional tariffs on more than 50 percent of U.S. exports in 2018 and 2019. It is mysterious that the legal text of the first phase of the agreement did not remove, reduce or even mention the word “tariffs,” and it did little to address the major trade problems that the United States has with China. Instead, the Trump administration has provided an excellent case study on why simple purchase commitments can`t go around. But the deal has a lot of criticism on both sides that Mr. Trump`s tactics have been economically damaging and that the deal leaves many important economic issues unresolved. And there is always that risk, as China`s Hard Communist Party points out in the Global Times: “Can a provisional trade agreement reached at a time when china-U.S. strategic relations are in sharp decline really work? Will it replace it with new conflicts or new progress as negotiations continue? The United States and China must resume negotiations on important policies that are not affected by the first phase agreement.
Trump`s trade war has failed to address what really concerns U.S.-China trade relations. It is time for a new approach. Washington and Beijing had initially agreed in October to implement a “Phase One” agreement that would allow China to buy between $40 billion and $50 billion worth of U.S. agricultural products, Trump said at the time. The agreement also included commitments from China regarding its currency, intellectual property and access to Chinese markets, Trump noted. Donald Trump said last week that he and Chinese President Xi Jinping would have a signing ceremony for the agreement. Economists expect the United States to reduce tariffs on Chinese products in exchange for better access to the Chinese market for U.S. agricultural products. This raises the question of what will happen in the medium term if the trade conflict between China and the United States intensifies to the point where both countries begin to expect countries to prioritize trade in one or the other in order to continue to do business with their elected superpower. This will disappoint both Huawei and the Chinese government, furious at Washington`s relationship with U.S.-China relations. The limited agreement provides for a pause in the trade war between the countries, with a withdrawal of some taxes and China saying it is ready to increase some U.S. imports, especially in the agricultural sector.
The agreement also leaves open the question of how both sides will interpret these key aspects of the agreement. There are already signs of difference. Chinese media have suggested that the dispute settlement mechanism is not dictated by the United States, in agreement with the Embassies in Washington. From the beginning, an additional $200 billion in sales to China were a worrying goal. Nearly 30% of U.S. merchandise exports to China are not even covered by the Phase One agreement. And for those who covered the agreement, a review of 15 product groups shows that their sales to China were influenced by various factors, including plane crashes, outbreaks, export controls, legal decisions of