The USA and China had been at a standstill in trade deal negotiations for some time.
But now, things are changing.
President Trump announced that the US and China had come to an agreement on Phase 1 of a new trade deal.
Trump tweeted: “China and the USA are working on selecting a new site for signing a Phase One of Trade Agreement, about 60 % of the total deal, after APEC in Chile was canceled due to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!”
China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!
— Donald J. Trump (@realDonaldTrump) October 31, 2019
This deal is important for the growth of the American economy. Economists have faulted the trade war with slowing economic growth in an otherwise strong economy.
The particulars of the agreement are still unknown, but the agreement is said to address issues with intellectual property and financial services and includes a pledge from China to buy $40 billion worth of American agricultural products.
For now, the tariff battle has been put on hold.
China has been taking advantage of our businesses for years by stealing their intellectual property and violating trade agreements.
That has been one of President Trump’s central concerns since he came into office and he is seeking to remedy those concerns with a new trade deal that is fairer for American businesses.
The trade deal has hit China harder than the United States. They need to make a deal before it gets worse.
Fox Business reported, “The longer Beijing waits to give in on key issues, the more damage will be done to the Chinese economy. China’s gross domestic product grew at a 6 percent rate in the three months ending in September, the weakest in 26 years, government data showed.
Manufacturing activity, which accounts for about 40 percent of China’s GDP, showed further deterioration in a report released Thursday. The Purchasing Managers Index fell deeper into contraction, with a print of 49.3 in October, as new export orders fell for a 17th straight month.
It was the sixth straight month the sector shrunk. Total new orders fell back into contraction after a brief spurt of expansion in September, signaling domestic weakness as well.”
However, there is some concern that China may not be willing to deal long-term.
Bloomberg reported that “Chinese officials are casting doubts about reaching a comprehensive long term trade deal with the U.S. even as the two sides get close to signing a phase one agreement.
In private conversations with visitors to Beijing and other interlocutors in recent weeks, Chinese officials have warned they won’t budge on the thorniest issues, according to people familiar with the matter. They remain concerned about President Trump’s impulsive nature and the risk he may back out of even the limited deal both sides say they want to sign in the coming weeks.”
Time will tell if the two sides can come to an agreement and finally move on with a more equitable trade pact.
The time has come for the two sides to make a deal.