U.S, China reach tentative deal, Trump suspends planned tariff hike on Chinese imports
Phase one of a U.S China trade deal has seen the U.S back down on a tariff increase of Chinese Goods that was expected to take place this week. CNBC International unpacks the deal.
Mon, 14 Oct 2019 11:21:12 GMT
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AI Generated Summary
- The U.S-China trade deal marks the beginning of a potentially three-phase agreement, with significant commitments from both parties to address key issues such as currency transparency and agricultural goods purchase.
- The decision to structure the deal in phases reflects its complexity and broad scope, with negotiations set to continue over the coming weeks leading to a formal signing during the APEC summit.
- While the market response to the deal has been positive, analysts emphasize the need for vigilance amidst ongoing global economic challenges, suggesting a cautious approach towards long-term market implications.
In a recent announcement, President Trump revealed details of the much-anticipated U.S-China trade deal, marking the first of a potentially three-phase agreement. The deal, which has been described as substantial and larger in scale than previous iterations, includes key provisions such as currency transparency commitments and a pledge by China to purchase up to $50 billion in U.S. agricultural goods. Additionally, a planned tariff hike set for October 15th has been suspended, generating optimism in the market. Despite earlier assertions by President Trump for a comprehensive deal, the decision to structure the agreement in phases was justified on the basis of its complexity and coverage. Top negotiators will spend the next four to five weeks outlining the specifics of the deal, with a formal signing expected during the APEC summit in mid-November, coinciding with a start to second-phase negotiations. The agreement also addresses intellectual property rights, signaling potential continued discussions in a third phase should the need arise. While the deal has been viewed as a win for the economy and the market, questions loom over the intricacies of future negotiations and the broader economic landscape. Analysts have welcomed the respite from imminent tariffs but caution against premature exuberance, citing ongoing global economic challenges and the need for sustained indicators of improvement before a definitive shift in market sentiment. Amidst the positive market response to the announcement, debates continue on the longer-term implications and the need for a cautious approach in the face of evolving economic dynamics.
