The US and China (finally) sign a partial trade agreement — but Trade War's still on
Phase 1... Complete. After 2 years of trade-war-ing that shook up global markets, the US and China signed an agreement that de-escalates the situation. It looks like China's making (almost) all the policy changes and concessions:
- USA gets more exports: China agreed to increase the amount of American goods it buys by $200B total over 2 years (ship off the soybeans, grains, manufactured parts).
- USA gets access: China also agreed to open up its market to American financial companies (Mastercard, Visa, and AmEx got shoutouts), which were previously banned/denied.
- USA gets vague promises: China infamously forces US companies that want to operate there to first give up their biz secret sauce. China denies it does this (despite evidence) and promises in this deal not to. FYI, China won't change laws to enforce this.
- China still gets most tariffs: The US is keeping tariffs on 3/4 of what Americans import from China, aka $370B worth of stuff each year. Trump said these "will all come off" if future negotiations lead to agreement part-two (he kept them on as leverage).
Another thing China gets (but not part of the actual agreement)... The US will cancel planned tariffs on Made in China consumer goods that would've made Apple and Nike products 25% more expensive for Americans. Plus, it cut existing tariffs on another $120B of Chinese goods in half. Boom.
The goal of the Trump tariffs... was to get Americans to buy less Made in China goods, hurting China's economy and pressuring it to change. US imports of Chinese goods actually rose in 2018, but are now down 17% from 2017. Meanwhile, PBS estimates the average American household will pay $800 per year in higher costs thanks to tariffs — that's a total $102B annually in costs for Americans (those tariffs haven't gone away).