US and China sign phase one of trade deal, Trump claims it rights ‘wrongs of the past’
The 86-page agreement includes pledges from Beijing to open Chinese markets to more American companies, and increase farm and energy exports.
United States President Donald Trump on Wednesday signed a preliminary trade deal with China that includes pledges from Beijing to open Chinese markets to more American companies, increase farm and energy exports, and provide greater protection for American technology and trade secrets, CNN reported. The two countries hope that the 86-page agreement will end a punishing trade war that has been on over the past two years.
In the first year, China is expected to more than double its purchases from American farmers. Beijing has committed to purchase an additional $200 billion (Rs 14 lakh crore) worth of American goods and services by 2021 and is expected to ease some of the tariffs imposed on US products, reported The New York Times. However, most of the tariffs Trump placed on $360 billion (Rs 25 lakh crore) worth of Chinese goods still remain in place, according to Bloomberg.
“Today we take a momentous step, one that has never been taken before with China toward a future of fair and reciprocal trade with China,” Trump told reporters at the White House. “Together we are righting the wrongs of the past.”
The US president, who is up for re-election later this year, had promised in his 2016 campaign that he would get tough on China, claiming that unfavourable trade terms had destroyed American industry and taken away jobs. However, this tough stance threatened to plunge the two countries in a state of permanent trade war. “As a candidate for president, I vowed strong action,” Trump said. “Unlike those who came before me, I kept my promise.”
However, the deal’s critics pointed out the flaws in the agreement, and claimed many problems remained unresolved. They said China had rejected demands to include promises to refrain from hacking American companies, insisting it was not a trade issue. The pact also does little to address Beijing’s policy of subsidising and backing crucial industries that compete with US companies in sectors such as solar energy and steel, they added.
“A ceremony at the White House can’t hide the stark truth about the ‘Phase 1’ China trade deal: The deal does absolutely nothing to curtail China’s subsidies to its manufacturers,” tweeted Alliance for American Manufacturing President Scott Paul. “All those ‘forgotten men and women’ in U.S. factories have, once again, been forgotten.” The United Steelworkers union is part of the alliance.
Also read:
Trump’s trade war with China benefits lobbyists, but is bleeding small US businesses dry