The trade agreement between these super developed countries is aimed at benefiting both their economies at a larger and profitable scale. On January 15, 2020, both counties that are US and China had a sit-down and finally said yes to the long-awaited Phase One trade deal of the Agreement this is the US-China Economic and Trade Agreement. This trade deal between the two countries has been perceived and believed to be a tool in de-escalating the so-called US-China Trade war that has been on-going. In the past 18 months or so, we have seen the two powerful economic counties battle against each other without the hope of burying the hatchet with an agreement. The economic battle led to several restrictions from both parties such as a Tariff war between the two as a payback, establishment of foreign technology restrictions and the cases were presented and battled at the WTO. This led to the on-off meetings, back and forth negotiations which brought no deal or any sort of agreement on the table for the two countries to conform to and agree to work together.
China and the US were both glad that finally the deal had been reached and sealed with both parties signatures, Trump hailed the deal as ‘a momentous step’ that will see both countries strive to make their economies outstanding and growing. China, on the other hand, did not fail to comment on the signed agreement, the Chinese Vice President Liu He who was representing the Chinese President, XI Jinping commended the trade deal and termed it as an indication for resolving any form of disagreement or difference between the two. The Phase One trade agreement became a deal-breaker for the betterment and growth of the economies of both the US and China.
Although the agreement has been signed and agreed upon, it has left some pending questions that people are still asking. The most crucial of the industrial policies and subsidies that are very prominent and meaningful to China and if failed to be addressed however good the deal is, the trade might just erupt at any particular moment. A revision of Phase One Agreement shows that China vowed to make $200 billion in buying US products and besides promise to address the currency, intellectual concerns as well as improve the idea of market access is crucial and key sectors one of them being the financial services. On the other hand, the US tabled its reforms in the Agreement stating that it will cancel tariffs that had been planned to be effective beginning 15th January 2020. It also stated on cutting in half a previous round of 15% of the tariffs on $120 billion in its trade with China. Both countries’ grievances and solutions are enticing and give lots of hope on economic growth however if the concerns on subsidies by China are not addressed then both nations are on the verge of experiencing the Trade war once again.
Both sides have agreed on making more frequent talks to keep in touch and also address any issues that may arise in line with their trade argument. Both countries despite the Trade war that had escalated before the signing of the Agreement, have dire need to restore the economic relationship. What does this mean to the Private sectors in either China or Us? Well, we are eager to see the outcome of the Phase One Agreement since some of China’s private sectors such as HP had started looking for other non-US suppliers for their products.