After the killing of Iranian general, Whitehouse has surprised the world again by successfully executing a trade deal with China after a long trade war which had been affecting the two economic giants for nearly two years. American administration pushed the deal which is being taken as a win-win initiative by both the administrations despite of their opposing economic ideologies and statesmanship. The deal was signed in Washington by the President Donald trump who called it “transformative” and Chinese Vice Premier Liu He who called it “win-win” while the Chinese president Xi Jinping was off to Myanmar for the New Silk Road Economic Belt project deal, which may reflect the hierarchy of Chinese administrative focuses.
The agreement encompasses mostly American directed proposals. Firstly, China is committed to buy more US goods ,all worth $200 billion for next two years ;secondly, China will crack down on USA tech theft currency manipulation-for which America has been accusing China since the start of trade war- and lastly enforcement mechanism for China that is outside the World Trade Organization. These accusations resulted in an intensifying trade war, compelling American imposition of heavy tariffs on Chinese products, reducing their sales in America and effecting the local businesses. On the other hand, hit was also taken by Chinese economy. Chinese authorities retaliated by placing large tariffs and enormous reduction on certain imports from America like soya bean and dairy products, extensively pressuring American agriculture and farming sector; the region being affected most by these reductions was American Midwest. The centerpiece of the deal was that China will buy $40b worth of agricultural products and will strive for another $10b with additional $54b in energy and $78b in manufactured goods. This was called the phase one of the trade deal, and the phase 2 would follow sometime around November of the year, which Trump administration calls more favorable for the farmers. The deal is seen by the two economic giants as great initiative to strengthen their relationship and as a beneficial move for global economics. The deal is already facing widespread skepticism about its benefits for the global economy and China’s ability to meet ambitious targets as well as future compliance.
The deal is not just being scrutinized for its substance, it is also being criticized for the issues that have not been addressed at all and were major concerns during the trade war. Among these undiscussed issues the three major ones are worth mentioning here. The first one is China’s “state-backed” hacking that has victimized western governmental agencies and private companies. Second, China’s massive subsidizing of certain industries, called as “a marriage of business and government”, which has directly attacked the US export figures of such industries like steel, solar panel, shipbuilding and electric battery. The third major issue that was not comprehensively covered was tit-for-tat tariff war between China and the US. Since trump administration wanted to make “one big deal” that could solve all trade problems with China, it was a surprise that little was done concerning these tariffs except halving the tariff rate to 7.5 percent on about $120 billion worth of Chinese goods, leaving heavy 25 percent tariff on $250 billion worth of goods untouched and China’s retaliatory tariff on over $100bn in US goods. Despite the criticism and accusation of lack of substance in the deal, Trump administration has regarded the deal as a triumph and a monumental step in Trump’s “America first” policy. “Today we take a momentous step, one that has never been taken before with china, towards a future of fair and reciprocal trade, “said Donald Trump, “it just doesn’t get better than this”. Myron Brilliant, executive