A partial truce in the gruesome trade war between the United State and China – the two largest economies of the world, was achieved by the singing of the so called phase one of a trade agreement between the two countries.
The deal was signed by US President Donald Trump and Chinese Vice Premier Liu He which brought in some respite for a trade war that had been ongoing for more than 18 month now. The trade war has toiled global financial markets, upended global supply chains and had threatened to push the global economy into recession.
“President Trump has shown us that tough negotiation as the means to the end works," said Larry Kudlow, the White House senior economic adviser. "This is huge. Nothing like this in history has ever happened before.”
Under the phase one trade agreement, over the next two years, China will purchase US agricultural at "an average" of $40 billion a year. China has also pledged to buy more of US manufactured goods worth $77.8 billion in the same period and includes products such as cars, aircraft and farm machinery. Further, $52.4 billion worth of in US oil and gas and $37.9 billion worth of financial and other services will also be purchased by China. Beijing has also pledged to enhance measures for protecting intellectual property of American companies in China.
The deal was welcomed by Wall Street and other markets all around the world. There was a jump of almost 200 points in the Dow Jones Industrial Average soon after the signing of the deal which surpassed the psychological 29,000 mark again, .
Over the last 18 months, the trade war had significantly impacted markets as companies and traders were hit by the import tariffs imposed by both parties on each other’s goods. According to the prediction of the International Monetary Fund (IMF), there would be a loss of 0.1 per cent off the global growth this year because of the trade war despite Trump making slight of the trade war back in May last year by saying that it was nothing but "a little squabble". The IMF has said that global markets have already lost about $1 trillion due to the trade war.
However the details of the trade deal has not been able to impress many. Some economists said that mot much has been achieved actually through the deal even after almost International Monetary Fund.
"It doesn't include anything that is related to the entire issues surrounding Huawei, 5G, export controls or a host of new technologies," said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics.
"There is nothing here concerning Chinese subsidies ... and that is the big omission," Kirkegaard said in an interview. "If you're worried about China as a long-term tech competitor, then clearly the logic of that argument rests with the fact that the Chinese are 'rigging the system' through state-owned subsidies," he said.
(Source:www.nbcnews.com)
The deal was signed by US President Donald Trump and Chinese Vice Premier Liu He which brought in some respite for a trade war that had been ongoing for more than 18 month now. The trade war has toiled global financial markets, upended global supply chains and had threatened to push the global economy into recession.
“President Trump has shown us that tough negotiation as the means to the end works," said Larry Kudlow, the White House senior economic adviser. "This is huge. Nothing like this in history has ever happened before.”
Under the phase one trade agreement, over the next two years, China will purchase US agricultural at "an average" of $40 billion a year. China has also pledged to buy more of US manufactured goods worth $77.8 billion in the same period and includes products such as cars, aircraft and farm machinery. Further, $52.4 billion worth of in US oil and gas and $37.9 billion worth of financial and other services will also be purchased by China. Beijing has also pledged to enhance measures for protecting intellectual property of American companies in China.
The deal was welcomed by Wall Street and other markets all around the world. There was a jump of almost 200 points in the Dow Jones Industrial Average soon after the signing of the deal which surpassed the psychological 29,000 mark again, .
Over the last 18 months, the trade war had significantly impacted markets as companies and traders were hit by the import tariffs imposed by both parties on each other’s goods. According to the prediction of the International Monetary Fund (IMF), there would be a loss of 0.1 per cent off the global growth this year because of the trade war despite Trump making slight of the trade war back in May last year by saying that it was nothing but "a little squabble". The IMF has said that global markets have already lost about $1 trillion due to the trade war.
However the details of the trade deal has not been able to impress many. Some economists said that mot much has been achieved actually through the deal even after almost International Monetary Fund.
"It doesn't include anything that is related to the entire issues surrounding Huawei, 5G, export controls or a host of new technologies," said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics.
"There is nothing here concerning Chinese subsidies ... and that is the big omission," Kirkegaard said in an interview. "If you're worried about China as a long-term tech competitor, then clearly the logic of that argument rests with the fact that the Chinese are 'rigging the system' through state-owned subsidies," he said.
(Source:www.nbcnews.com)
