There has been much hype about the signing of Phase One (and probably only) US-China trade deal. However based on a front page story in today’s Washington Post, there is not much there. The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors that had them, although some were halved. But numerous US sectors see no change at all and are now viewing the situation as not likely to improve, with them suffering losses of business likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and other sectors there is not much reduction of uncertainty regarding US-China trade, so not likely much increase in investment.
The main items in it besides no worsening of tariffs, China has made promises not to pressure US firms to turn over technology and also to increase imports from the US by $200 billion over the next two years, especially in energy and agriculture. So maybe US soybean farmers will no longer need the bailouts of billions of $ Trump has been providing to them. However, such promises have been made in the past.
As it is, I am watching commentators on Bloomberg, and about the most any of them are willing to say is that this “puts a floor” on the “deterioration” of US-China trade relations. That is far from some dramatic breakthrough, and most of the tariffs put on as part of the US-China trade war remain in place.
This looks like it may be a way to make it a status quo or back burner issue until after the election.
Of course Trump will always be able to blow it up if he decides that would be to his advantage.
I don’t see how they “buy” 200 billion worth of goods. The Chinese economy is slowing and that is why purchases were flattening by 2014.
Its noise and circuses.
Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise and circus. Check it out!
Since USMCA = NAFTA 1.1, the changes between what Trump called the worst trade deal ever and his new deal is a nothing burger as well. But wait – USMCA is a big bold beautiful deal since Trump put his arrogant oversized meglomaniac name on it!
One saving grace was they canceled the NAFTA Pharma 10 year exclusivity give away! They really did and bragged about it. Except you can find a similar 12 year giveaway in the House Budget bill for Biologics. 🙂