US-China trade deal is just a temporary truce

The USA and China signed an initial "Phase One" trade agreement on January, 15. "Americans wanted to make sure that everyone would remember this trade deal as an epoch-making event of historic significance. The signing ceremony was attended by more than 200 high-ranking guests. President Trump highlighted that the U.S.-China trade agreement was a deal of global importance," RISS expert Vyacheslav Kholodkov said.

"The US-China trade pact is just a temporary truce that will last until the U.S presidential election," he added. The trade deal could be a major political boost for Trump during the 2020 presidential election campaign. But after election victory, Trump is likely to increase pressure on Beijing.

The U.S. and China have signed a "Phase One" trade pact, but both parties will have to deal with some of the more controversial issues as they move ahead with negotiations. A "Phase One" agreement aims to reduce the bilateral trade imbalances. The USA and China agreed not to impose new additional tariffs. The United States has announced to reduce duties by half on Chinese goods in the amount of $ 120 billion. Washington is also planning to remain in place increased U.S. tariffs on Chinese goods in the amount of $ 250 billion because otherwise it has no decisive advantages left to reach an agreement.

RISS expert pointed out that some of the provisions included in the trade agreement might be interpreted in completely different ways. According to the trade pact, China pledges to open up its financial services sector to more foreign competition. But it is unclear how and when American companies will be able to enter the Chinese market. So it will be difficult to implement this provision. It is also unclear how China will be able to increase American agricultural imports. In the feed sector, pigs are the biggest consumers of soybeans that are purchased from American farmers. But pig population has declined significantly due to the African swine fever. This means it will be difficult for China to increase US soybean purchases. But the fact is that the United States is China’s main soybean supplier.

"The U.S. emphasizes that further steps in the trade agreement will be aimed at limiting China's technological advances. Washington has already made some steps in this direction. The FBI has warned major US universities that China is using its students at US colleges to spy on America. More and more Chinese students are leaving American universities to avoid being labelled as spies by the Trump administration. There are also other problems in U.S.-China bilateral relations such as sanctions on Chinese and Hong Kong officials over human rights abuses in Hong Kong, the controversy regarding the political status of Taiwan, the Spratly Islands dispute, and the problem of Muslims in China's Xinjiang Uygur Autonomous Region. Trump's view of China as a strategic rival is still relevant and Washington will put a lot of pressure on Beijing," V.Kholodkov concluded.

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