Even as the “phase one” trade deal between the U.S. and China averted an escalation of the trade war, the agreement is widely seen as a small-bore pact that focused on relatively easy issues, such as agricultural and currency.
The deal was a product of compromise by two countries eager for a respite amid growing concerns about economic slowdowns. The two nations must tackle structural issues, such as China’s government subsidies, in the next phase of talks, and a real end to the trade war that would eliminate punitive tariffs imposed on each other still remains elusive.
U.S. President Donald Trump was exuberant in announcing the agreement that would ease the pain of the Midwestern farmers that make up the core of his support base.
“The deal I just made with China is, by far, the greatest and biggest ever made for our Great Patriot Farmers in the history of our Country,” Trump tweeted Saturday morning. “In fact, there is a question as to whether or not this much product can be produced? Our farmers will figure it out. Thank you China!”
In contrast, the Chinese side remained subdued. Beijing issued a statement reporting progress in agriculture but did not mention an “agreement.” State television reported the deal, although it downplayed the story. Trump’s about-face in May last year after an agreement to avoid tariffs was not lost on top Chinese officials. (more…)