Earlier this Saturday, President Donald Trump alluded to a long awaited agreement on the Phase One trade pact, stating that the United States and China would very shortly sign and formally agree to the pact.
“We just achieved a breakthrough on the trade deal and we will be signing it very shortly,” Trump said.
This might just mark the end of a long drawn out battle between the nations, to which the major highlight has been Trump’s tightening of trade rules and laws to force China into agreeing with his conditions. This battle between the world’s two largest economies has caused tremendous global turmoil.
This pact states that the United States would agree to reduce some tariffs in exchange for a big jump in Chinese purchases of American farm products, thereby reducing the United States’ trade deficit.
Whether this step is an act of preventing the impending recession in the US, or whether there is some other reason, it can be stated with a good deal of certainty that this will put a lot of uneasy economist as well as citizens at rest. The tit for tat war hasn’t been beneficial to either party and just been the root of too much speculation. This can even be a move from Trump to save face, considering the adversities he has been facing with impeachment related proceedings and in the Parliament. What remains to be seen is how this series of events further unfold – will Trump keep his stand or is there going to be a seemingly amicable agreement?
Treasury Secretary Steven Mnuchin has suggested that this pact would be signed in January, saying that the deal had already been translated and was just undergoing a technical “scrub.” Well, while things do look positive, one should not be surprised if there are a few caveats to the final document which might not be the most mutual, to put it in mild terms.