Donald Trump has labelled the agreement the US signed with China yesterday as “one of the greatest trade deals ever made”, adding that it has put the US in a “great position” for the next stage of talks.
The world’s two biggest economies signed a “phase one” trade deal at the White House in Washington yesterday, ushering in a fragile peace in their long-running tariff war.
Under the deal, China will buy at least $200bn (£154bn) more goods above its 2017 purchases level. These will include manufacturing, agricultural and services products.
In return, the US will halve existing tariffs on $120bn of other goods to 7.5 per cent. Yet tariffs of 25 per cent on $250bn of Chinese goods will stay in place until a “phase two” deal.
President Trump – who revelled in the signing of agreement during the ceremony yesterday – tweeted: “One of the greatest trade deals ever made! Also good for China and our long term relationship.
“250 Billion Dollars will be coming back to our Country, and we are now in a great position for a Phase Two start. There has never been anything like this in U.S. history!”
Although investors are thankful that the two sides have come to an agreement, many analysts say the deal is well below what both sides would have wanted.
Kerstin Braun, president of trade finance group Stenn, said: “While it’s a start, the deal fails to cover the significant issues that prompted the war in the first place.
“This includes China’s preferential support of state-owned enterprises and technology transfer from American companies doing business there.”
The European Union’s trade commissioner Phil Hogan today said the bloc would have to check to see whether the agreement complied with international rules.
Speaking to a conference in London via videolink, he said the details were so far “a bit sketchy”.
“They have stepped outside the usual framework for doing deals … and they are dealing directly on a bilateral basis and we will have to assess whether it is WTO compliant,” he said.