Home The Economy Mediocre Trade Deal with China Moves Forward, Trump Claims Victory

Mediocre Trade Deal with China Moves Forward, Trump Claims Victory

by Lame Duck Team

The limited trade deal that the Trump administration and Beijing announced Friday means Americans will avoid a holiday tax increase on imported toys, clothing and smartphones. U.S. farmers can sell more soybeans and pork to China. And American companies should face less pressure to hand over trade secrets to Beijing.

But what the administration gained from the so-called Phase 1 deal that President Donald Trump celebrated falls well short of the demands the president issued when he launched a trade war against Beijing 17 months ago. Further rounds of negotiations will be required to achieve a more significant agreement.

Still, Friday’s preliminary agreement managed to at least defuse a conflict that had put investors on edge and slowed economic growth entering an election year in which Trump plans to campaign, at least in part, on America’s prosperity.

Under the agreement, the Trump administration dropped its plan to impose new tariffs on $160 billion of Chinese imports beginning Sunday — a tax that would have likely led to higher prices on many consumer goods. The administration also agreed to reduce its existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%.

In return, U.S. Trade Representative Robert Lighthizer told reporters, China agreed to buy $40 billion a year in U.S. farm products over two years, even though U.S. agricultural exports to China have never topped $26 billion a year. In addition, Beijing committed to ending a long-standing practice of pressuring companies to hand over their technology as a condition of gaining access to the Chinese market.

See What Major News Sources are Saying About This Below:

The limited trade deal that the Trump administration and Beijing announced Friday means Americans will avoid a holiday tax increase on imported toys, clothing and smartphones. U.S. farmers can sell more soybeans and pork to China.

The Trump administration has reached a phase one trade deal with China in principle, pending approval from President Donald Trump, three sources close to talks told CNBC. Stock futures jumped on the news but the gains were capped as traders awaited confirmation of the deal from China.

Ever since President Trump launched a trade war with China in March 2018, I have been hearing foreign-policy elites say: “Trump is a terrible president. But he’s right about China, and I’m glad he’s doing something about it.” Indeed, the trade war has been one of the few Trump policies that has won support from many Democrats.

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