The United States and China signed an initial trade deal Wednesday to resolve some of the issues at the heart of an economic standoff that has persisted between the world’s two largest economies for the past 18 months.
U.S. President Donald Trump hosted Chinese Vice Premier Liu He for the signing ceremony at the White House.
“Together we are righting the wrongs of the past,” said Trump, who added he will visit China again in the “not-too-distant future.”
Trump said the agreement is “an unbelievable deal for the United States” that’ll lead to “stable peace throughout the world.”
Vice Premier Liu read a letter from Chinese President Xi Jingping, which said “In the next step the two sides need to implement the agreement in earnest.”
A White House statement said “This historic agreement includes a major commitment by China to make significant reforms in a wide range of critical areas and to make substantial additional purchases of American goods and services in the coming years. This agreement is strengthened by a strong dispute resolution system that ensures prompt and effective implementation and enforcement of this historic deal.”
The sides agreed to what they are calling the Phase 1 agreement in mid-December.
What’s in the deal?
The agreement calls for China to boost its purchases of U.S. goods, halt the practice of forcing foreign companies to transfer technology, and to not manipulate its currency in order to makes its exports cheaper.
The United States has already removed its designation of China as a currency manipulator, and under the trade deal it is halting plans to add new tariffs on billions of dollars worth of Chinese goods, while cutting in half tariffs on about $110 billion of Chinese products.
U.S. tariffs will remain in place on about $360 billion of imports from China.
The agreement also does not address China’s subsidies to state-owned companies, an issue likely to be discussed in the next phase of trade talks.
Additional negotiations are not expected anytime soon.
“I think both sides are reasonably happy with this compromise even though it doesn’t really tackle the core issues,” Edward Alden, a senior fellow at the Council on Foreign Relations, told VOA.
He said the deal amounts to a “modest win-win for both sides” with China gaining a reprieve from the trade war that has harmed its economic growth and the Trump administration getting to set aside a major issue until after his re-election campaign.
“From President Trump’s perspective, it gives him a victory of sorts,” Alden said. “His strongest card in November is the U.S. economy. He doesn’t want to do anything to upset the stock markets, so a period of kind of calm on the U.S.-China front also serves the administration’s interests at this point.”