Starting from verbal threats from US president Trump, it was followed through on July 2018 by imposing sweeping tariffs on China. Since then there has been several action and reactions from both camps that constitutes for the trade war between the countries.
The damage thus far:
Total US tariffs on Chinese goods: US$550 billion
Total Chinese tariffs on US goods: US$185 billion
Phase 1 Trade Deal
After 18 tense months, the US and China finally signed the phase 1 trade deal, which eases the relationship between the two economic powerhouses. China agrees to commit to additional purchasing of US goods and services while the US confirms to eliminate certain tariffs and reducing duties. In addition, the phase 1 trade deal also deals with matters like intellectual property, technology transfer, currency and foreign exchange.
China part of the deal:
Additional purchasing of USD 200 billion worth of US goods and services over the next 2 years, including:
- Manufactured goods (USD 78 billion)
- Energy purchases (USD 54 billion)
- Farm products (USD 32 billion)
- Services (USD 38 billion)
US part of the deal:
Cutting tariffs and reducing duties from 15 to 7.5% on USD 120 billion worth of Chinese products.
As a result of this phase 1 trade deal, the trade in the following products will directly benefit:
- Crude oil
- Meats (pork, beef and chicken)
The trade conflict between China and US hasn’t been solved yet. Phase 2 negotiation should be started soon. The focus of phase 2 negotiation is expected to be on US tariff concession and China’s industrial subsidy.
If you would like to know more about related news and developments, please don’t hesitate to contact us at Dr2 Consultants Shanghai by emailing email@example.com.