The new pact gives each side some, but not a lot, of what it wants.
China has agreed to buy about $200 billion a year in U.S. goods, stiffen protections for intellectual property, and open its markets wider to American firms, especially in financial services. The deal leaves in place about $370 billion in tariffs on Chinese goods.
China agreed to more widely accept Mastercard, Visa, and American Express cards; the U.S. will move to accept China’s UnionPay credit card.
China will not be required to make economic policy reforms the U.S. has sought.
Talks will continue around removing tariffs. Also, it isn’t clear whether China can absorb $200 billion more in U.S. products, whether the U.S. can produce an additional $200 billion of these items, and how China’s current trading partners might react to losing business to the United States.
China made more concessions in the treaty than did the U.S., in part to establish a footing for ongoing negotiations.
TREND FORECAST: As we have been noting for two years, the global economic slowdown has little to do with China-U.S. trade differences. Neither this deal nor the new NAFTA agreement will reverse the trend leading to the 2021 “Greatest Depression.”
