Daily Management Review

Phase 1 Of A US-China Trade Deal Outlined By Trump, Suspends New US Tariffs


Phase 1 Of A US-China Trade Deal Outlined By Trump, Suspends New US Tariffs
The first phase of a trade deal with China was outlined by the United States President Donald Trump on Friday which is being seen as the first concrete steps taken by the two sides to bring an end to the trade war between the two countries. Trump also suspended the imposition of a threatened tariff hike that was scheduled to take effect from next week. However according to reports quoting officials from both sides, the two countries still need to do much more work before a comprehensive trade agreement can be arrived at.
Since the beginning of the trade war between the two largest economies of the world about 15 months ago, the emergence of a possible deal that covers agriculture, currency and certain areas of intellectual property protection is the largest step taken yet by both the parties that can possibly bring an end to the trade war that has roiled international financial markets and slowed down global trade raising fears of a global recession. 
However many details were absent from the Friday's announcement and Trump said that it would take as long as five weeks before a complete trade agreement can be finalized. While expressing confidence that a deal could be struck within the time frame he put forward, Trump also warned at the same time that the deal could also fall apart within that period itself. 
"I think we have a fundamental understanding on the key issues. We've gone through a significant amount of paper, but there is more work to do," US Treasury Secretary Steven Mnuchin said as the two sides gathered with Donald Trump at the White House. "We will not sign an agreement unless we get and can tell the president that this is on paper," Mnuchin said.
The US and China were very close to coming to an agreement in trade. Trump said at the Oval Office with Chinese Vice-Premier Liu He sitting across a desk from him.
"There was a lot of friction between the United States and China, and now it's a love-fest. That's a good thing," Donald Trump said.
However a different tone sounded in the comments made by Liu. "We have made substantial progress in many fields. We are happy about it. We'll continue to make efforts," Liu said.
Both sides "agreed to make the efforts towards a final agreement", said China's official state-owned news organization Xinhua.
China was lauded by Trump for agreeing to buy as much as $50 billion in agricultural products as the US president attempted to show the farmers in some of the key swing states that he had secured their side as he prepares for a re-election.
While suspending the imposition of the latest proposed tariff hike, Trump d=id not make any change in the existing tariffs on Chinese imports worth billions of dollars.
There was however some skepticism about the announcement made by Trump. "I'm unsure that calling what was announced by President Trump an agreement is justified," said Scott Kennedy, a China trade expert at the Center for Strategic and International Studies in Washington. "If they couldn't agree on a text, that must mean they're not done. Wishing an agreement does not one make. This isn't a skinny deal. It's an invisible one," Kennedy said.