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President Trump and Chinese officials took a crucial step toward resolving the nearly two-year trade war between the world’s largest economies by signing a long-sought preliminary trade deal on Wednesday.
The so-called Phase One trade deal covers almost every corner of the U.S. and China’s complicated trading relationship, from agricultural imports and dairy quality standards to financial market access and intellectual property.
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Trump and his GOP allies have billed the agreement as a massive victory for the president and vindication for the damaging tariffs he imposed on Chinese goods.
Trump’s critics and trade experts counter that the deal sets potentially unattainable targets and could easily be skirted by China.
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China has a track record of shirking international trade commitments and Trump has not hesitated to retaliate against Beijing when he feels slighted.
If both sides can uphold the Phase One agreement, here’s what you can expect to see.
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Trump has long been obsessed with the vast gulf between the value of goods the U.S. imports from China and the value of U.S. products imported by Beijing. That difference, known as the trade deficit, represents the U.S. reliance on cheap consumer goods from China.
While economists say trade deficits are not necessarily bad, Trump equates the U.S. deficit with China to Beijing ripping off Americans.
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To narrow that gap, China agreed to increase purchases of U.S. goods and services by $200 billion over the next two years, including $77.7 billion for manufactured goods and $32 billion for agricultural products.
“The farmers are really happy with the new China Trade Deal and the soon to be signed deal with Mexico and Canada,” Trump tweeted Thursday, “but I hope the thing they will most remember is the fact that I was able to take massive incoming Tariff money and use it to help them get through the tough times!”
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China’s alleged record...
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