Averting the next round of the trade war – planned for Sunday – Washington and Beijing have reached a last-minute deal to cooperate mutually in ways that boost American agricultural exports to China and reduce tariffs on Chinese imports to the United States.
President Trump, who met with his top economic and trade aides, has okayed the agreement, which will not only be a reprieve for the affected businesses but also send a positive signal for the world economy since the two largest and interdependent economic powers also engage in geopolitical rivalries.
The IMF fears that the U.S.-China trade war would hurt consumers as well as cost billions of dollars to the world economy.
If implemented, the new deal will also help the US-China relations at a time of multiple global challenges including the climate change.
According to a Wall Street Journal report, Robert Lighthizer and Chinese Ambassador Cui Tiankai are expected to ink the deal on Friday.
The Journal cites Michael Pillsbury, an adviser to the president, as revealing that under the new agreement China would buy $50 billion worth of American agricultural goods, among other products, in 2020.
In reciprocity, the U.S. would reduce the tariff rate on many Chinese imports, which now ranges from 15% to 25%.
The WSJ reports that the first phase of the deal includes measures to improve intellectual property protection, open the Chinese financial services market and prevent currency manipulation while the second phase would “tackle more difficult problems, including forced-technology transfer, subsidies, and the behavior of Chinese state-owned firms.”
