U.s. And China Tiptoe Around Holes In New Trade Agreement
As part of the trade deal, China has promised to buy $200 billion worth of U.S. products, including soybeans and pork, but many experts have doubts about the deal: “China is unlikely to be able to meet its purchasing obligations under the phase one deal, which were largely unrealistic to start,” says Evan Rees, an Asia-Pacific analyst for Stratfor. a RANE company. Beijing had resisted a commitment to buy some quantities of U.S. agricultural products sooner and has struck new soybean contracts with Brazil since the start of the trade war. A recent study by the U.S. Federal Reserve showed that the Trump administration`s introduction of trade tariffs against China and other countries has led to job losses, particularly in manufacturing, and higher producer prices, which have been passed on to U.S. consumers. “Although it is still intact, the longevity of the Phase One trade deal is increasingly being called into question for a multitude of reasons, with many triggers that could lead the deal to a derailment, including Hong Kong, Huawei, Taiwan, the South China Sea and several human rights issues,” he said. The United States and China on Wednesday signed a first trade deal that will remove some tariffs and boost Chinese purchases of U.S. goods, defusing an 18-month dispute between the world`s two largest economies, but a number of fragile places have not been resolved. DISCUSSION QUESTIONS: Do you see the signing of the Phase One agreement as a positive step forward for U.S.
consumers, retailers and sellers? What needs to be done in phase two to pay off for the pain caused by 18 months of trade wars? “While markets seemed to be taking this deal as a risk signal, we should all be aware that trade headlines, especially the U.S., trade with China will be a constant feature of 2020,” said Hannah Anderson, Global Markets Strategist, J.P. Morgan Asset Management in Hong Kong. The GT said the trade deal was not the only topic in bilateral relations “that requires efforts to dispel doubts and concerns. The U.S. government needs to think about all the battlefields it has opened in recent months against China, such as actions against Chinese high-tech companies like Huawei, the U.S. threat to revoke Hong Kong`s special trade status, and its dispute over flight acquisitions. Either way, the Wall Street Journal of June 26 may have offered a plausible explanation for all this adrenaline rush. The daily revealed in a report that Beijing has begun to “silently” warn Washington that China`s purchases under January`s “Phase One” trade deal, which includes U.S. agricultural products, could cease altogether if the U.S.
crosses “red lines,” that is, when the Trump administration interferes in issues that the Chinese government considers “taboo.” Chinese officials recently expressed “strong dissatisfaction” with U.S. sanctions that came in response to a new national security law for Hong Kong, warning that crossing “red lines” and interfering in what China considers its own internal affairs could threaten the trade deal, the Wall Street Journal first reported Friday. Market turbulence and reduced investment linked to the trade war brought global growth in 2019 to its lowest level since the 2008-2009 financial crisis, the International Monetary Fund said in October. Soybean futures, which were traded 0.4 percent during the contract signing ceremony, fell further after Liu`s remarks, a sign that purchase targets were questionable for farmers and traders. While Yang stressed that China remains committed to the implementation of the trade deal and that the two sides should “cooperate,” the message also had a warning tone, sources told the Wall Street Journal. Trump, who has touted the Phase 1 deal as a pillar of his 2020 re-election campaign, said he would agree to remove the remaining tariffs once the two sides negotiate a “Phase 2” deal. . . .