U.s.-China Trade Agreement Text
The agreement provides the United States with certain benefits in financial services, including electronic payments, securities, fund management and insurance, but many of these changes were already underway. Already in 2017, in its attempt to ease tensions with the Trump administration, China had tried to give foreign companies greater supremacy in its financial sector, and U.S. banks and other companies held majority stakes in Chinese companies. Derek Scissors, a China expert at the American Enterprise Institute, said the trade war had already given Trump an advantage, even though he didn`t force Beijing to change its economic policy: Trump`s tariffs reduced Chinese exports to the United States and reduced America`s trade deficit with China. The government acknowledges that the agreement has not resolved some U.S. complaints, particularly the way the Chinese government subsidizes its businesses. That was the concern expressed when Trump sparked a trade war in July 2018 by imposing tariffs on Chinese imports. The deal leaves tariffs on about $360 billion in Chinese imports, with the government`s leverage hoping to generate concessions in the future. Mr.
Trump said his deal was a blessing for farmers, who are among the hardest hit by the trade war. The agreement contains substantial commitments from China on the purchase of agricultural products, aircraft, pharmaceuticals, oil and gas. The trade war between China and the United States has weighed on the economies of both countries. Tensions appear to have led to a slowdown in U.S. manufacturing. Chinese exports to the United States have collapsed. “We need to make sure that this is properly implemented,” Lighthizer said. “This is the first agreement of its kind, and we need to make sure it works.” Trump campaigned for the signing of trade as a way to provide economic justice to American workers, whom he claims have been betrayed by previous governments and their trade policies. Left: U.S. President Donald Trump holds Chinese Vice Premier Liu He after signing the “phase one” of the U.S.-China trade agreement in the East Room of the White House in Washington, U.S., January 15, 2020. Photo: Kevin Lamarque/Reuters Unlike other trade agreements that generally refer disputes to a neutral third party, the United States and China have decided to develop all the problems on their own.
The agreement creates bilateral dispute assessment and resolution offices to respond to and assess complaints. The agreement also includes an appeals process that will increase questions from mid-level officials to the offices of the U.S. trade agent and the Chinese vice premier. President Trump`s long-awaited trade deal with China involves significant changes in economic relations between the world`s largest economies. Nevertheless, the Phase 1 agreement did not resolve Washington`s fundamental differences with Beijing, which depends on massive state intervention in the economy to turn China into a technological powerhouse. The deal signed Wednesday has some victories for Mr. Trump: China has pledged to buy an additional $200 billion in U.S. goods and services by 2021 and to aggressively address trade practices that the Trump administration has criticized. But the text of the agreement does not provide enough information to determine how it will work in practice and it is not certain that China will interpret it differently from the United States.