The White House and Beijing officials on Friday confirmed that the two countries have come to agreement on a phase-one trade deal, averting a new wave of tariffs on billions of dollars of goods imported from Asian counties that were to be imposed on December 15.
The latest agreement on the phase-one trade deal is the first significant step towards ending the almost two-year-long tariff war between the United States and China. This certainly will bring in much relief to quite a few major industries that have been suffering for more than a year now.
Deal still unclear
Although the announcement was made, neither the Trump administration nor Beijing officials provided any specifics on the deal. It is still unclear how much of U.S. agricultural products has China agreed to buy and how much of the tariffs have been rolled back by the United States.
Trump made the announcement via a series of tweets. "We have agreed to a very large Phase One Deal with China," Trump said on Twitter Friday morning. However, the United States Trade Representative said that the deal covers intellectual property, technology transfers, agricultural goods, foreign exchange and financial services.
The deal was principally agreed on Thursday after Trump met advisors to discuss if the next round of tariffs should be delayed. Additional tariffs of 15% were set to take effect on December 15 that would have affected around $160 billion worth of Chinese goods.
Beginning of the end of Trade War?
Beijing and Washington have been trying to initiate talks for the past few months but no significant progress was being made thus far. The signing of the trade deal is being seen as a major victory for Trump, who had been under pressure for quite some time to do away with tariffs Chinese imports.
United States Trade Representative officials said that the US will continue with the existing 25% tariffs on $250 billion worth of Chinese goods. However, it will slash tariffs in half to 7.5% on Chinese imports worth $120 billion.
Who will get benefited immediately?
Washington has been pushing China to commit to buy $50 billion worth of U.S. agricultural produce in the coming year. Chinese officials said that details of the value will later provided later.
However, they said that per the deal, foreign companies will be assured more protection in China and vice-versa. This was one of the major issues that triggered the tariff war.
The major casualties of the tariff war so far has been the tech companies, automakers, retailers and the agriculture sector. Going by what the Chinese and United States Trade Representative officials said, the agriculture and tech sector are likely to get benefited immediately along with the retail sector.