The China-American Trade Agreement: What You Need to Know
The China-American trade agreement has been a hot topic in recent months, as it impacts not only the two countries involved, but also global markets. If you`re wondering what this agreement is all about and how it affects you, read on for a breakdown of the key points.
What is the China-American Trade Agreement?
The China-American trade agreement, also known as the phase one trade deal, is a partial trade agreement between the United States and China. The agreement was signed in January 2020 after months of negotiations and tariff escalations between the two countries.
The agreement aims to address several issues that have been at the forefront of the trade war between the US and China, including intellectual property theft, forced technology transfer, and currency manipulation. Under the agreement, China pledged to purchase an additional $200 billion in US goods and services over two years, including agricultural products, energy, and manufactured goods. In return, the US agreed to reduce tariffs on some Chinese goods and postpone tariffs on others.
How Does the Agreement Affect Trade?
The China-American trade agreement has significant implications for global trade. For one, the agreement provides some relief to US farmers, who have been hit hard by the trade war. China has agreed to purchase $50 billion worth of US agricultural products, including soybeans, pork, and wheat, over two years. This is a significant increase from previous levels of trade between the two countries.
However, some experts are skeptical about whether China will actually follow through on its commitments, particularly given the global economic downturn caused by the COVID-19 pandemic. In addition, the agreement does not address some of the more fundamental issues driving the trade war, such as China`s state subsidies for its industries.
What Does the Agreement Mean for the Global Economy?
The China-American trade agreement also has broader implications for the global economy. The trade war between the US and China has caused significant disruptions to global supply chains, and the agreement could help ease some of these disruptions by reducing tariffs and boosting trade.
However, the agreement also raises concerns about the US`s approach to trade policy. Some experts argue that the US`s unilateral approach to trade negotiations, including the use of tariffs as a negotiating tool, undermines the global trade system and could lead to more conflict in the future.
What`s Next?
The China-American trade agreement is only a partial resolution to the ongoing trade war between the US and China. Negotiations on a phase two agreement have yet to begin, and there are concerns that the COVID-19 pandemic could further complicate negotiations.
Overall, the China-American trade agreement represents a step forward in resolving some of the issues driving the trade war between the US and China. However, it remains to be seen whether the agreement will actually lead to increased trade and improved relations between the two countries.