The United States and China reached a first-phase trade agreement today, allowing Trump, who was caught in impeachment investigations and other political turmoil, to take a breather. However, observers said that this preliminary agreement lacks a mechanism for implementation and is fearful of being one-sided and superficial.
Washington and Beijing reached preliminary agreements covering related issues such as increased purchases of agricultural products, intellectual property protection, financial services and exchange rates.
The United States originally scheduled a 15th increase in the tariff rate of $250 billion worth of Chinese goods, and it was also suspended. Officials said that as the negotiations proceeded, another tax rate that was scheduled to be done on December 15th may be lifted.
However, Agence France-Presse believes that just as Trump celebrates the so-called “substantive first-phase agreement,” the agreement may take several weeks to finalize. The final details are still undecided. At present, the two sides are intertwined with hundreds of billions of dollars of goods. The tariffs imposed on the class will not be revoked for the time being.
Trump said China’s commitment to expand the purchase of US agricultural products to between $40 and $50 billion is a remarkable figure, almost doubling the amount of less than $20 billion in 2017.
The total export value of agricultural products in the United States in 2018 is 140 billion U.S. dollars. China’s increased purchases mean that almost one-third of the agricultural products in the United States will be exported to the Chinese market in the future.
Trump told the media at the White House: “So I told farmers to buy more and more traction machines.” Trump said that Liu He, the chief trade negotiator of Beijing, said at the end: “There has been a lot of friction with China in the past. The two sides launched a love feast.”
Trump said that it may take five weeks to complete the first phase and put the agreement into the text, which will include important issues such as exchange rate manipulation. He hopes to attend the APEC summit in Chile in mid-November. At the time, he signed an agreement with Chinese leader Xi Jinping.
However, some observers said that this preliminary agreement is still disappointing. Greg Daco, an analyst at Oxford Economics, called it a “significant handshake agreement.”
In the analysis report, Dakko pointed out that the preliminary agreement is certainly paving the way for a broader agreement, but behind the celebration, this is just a lack of implementation mechanism, a one-sided and superficial agreement, “for companies, this It only represents a reduction in damage, not more certainty.”
The National Retail Federation (NRF) said progress was encouraging, but “this is a step in the right direction, but uncertainty continues.”
US Treasury Secretary Manuchin said that although the details of the preliminary agreement are not many, the two sides have made good progress in opening up the financial services market in China and preventing the manipulation of the RMB exchange rate.