Art of the Deal: Trump secures historic trade deal with China, leaves tariffs up just in case, proving trade critics wrong yet again:
http://dailytorch.com/2020/01/art-of-the-deal-trump-secures-historic-trade-deal-with-china-leaves-tariffs-up-just-in-case-proving-trade-critics-wrong-yet-again/
President Donald Trump has once again done the impossible and secured a phase one trade agreement with China that leaves existing tariffs of 25 percent on $250 billion of goods and another 7.5 percent on the remaining $300 billion of goods. This is a breakthrough that had eluded Trump’s predecessors and that his critics said would be impossible. Tariffs would cause a trade war, they said. Instead they helped bring about a fair and reciprocal trade agreement. The deal includes new rules on intellectual property protections, forced technology transfer and enforceable currency provisions that prohibit competitive devaluations. China also agreed to more than $200 billion of purchases of U.S. manufacturing, financial services and agriculture, of which $50 billion will be agriculture, opening up China to U.S. exporters in a massive concession by Beijing. In exchange, tariffs were slightly lowered from 10 percent to 7.5 percent on the remaining $300 billion of goods, with the promise they’ll come down even more if and when a phase two agreement can be hammered out by U.S. and Chinese negotiators. Also, the U.S. Treasury dropped — for now and with the agreement in place — the designation of China as a currency manipulator. Such a deal was supposed to be impossible because China was never supposed to negotiate under duress and would certainly never agree to a deal that left the tariffs in place. Instead, even with the tariffs, China carried on the negotiation and ultimately followed through on phase one, even though 25 percent tariffs on $250 billion of goods and 7.5 percent tariffs on the other $300 billion of goods remained in place, proving the critics wrong. What do you think? Did the pressure work?
