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US President Donald Trump and Chinese Vice Premier Liu He signed the first chapter of a White House trade deal on Wednesday, January 15. The truce of the trade war launched by Donald Trump in the spring of 2018 is very effective.
From our correspondent in Washington,
The signing ceremony lasted over an hour. Donald Trump distributed the compliments. Its treasury secretary Steven Mnuchin spoke of a great victory for American industry and agriculture. He even spoke of " a giant step " and clarified that the United States had not committed to a further reduction in tariffs. " This will only happen if there is a phase 2 of the agreement, " he announced.
Chinese Vice Premier Liu He praised the importance of the agreement . He also read a long letter from President Xi Jinping to his American counterpart.
LIVE: POTUS Signs the Phase One Trade Agreement! https://t.co/teqGqjdgeZ
The White House (@WhiteHouse) January 15, 2020No new customs duties
Beijing is committed to increasing its purchases of American products by $ 200 billion over two years. Agricultural products, services and energy are concerned. China also promises to better protect intellectual property and end the manipulation of its currency.
In exchange, the United States renounces the imposition of new customs duties on Chinese goods, and halves those imposed on September 1 on 120 billion dollars of products from Beijing . They will go from 15 to 7.5%. The 25% tax on 250 billion Chinese goods will remain in place for the time being.
A still incomplete agreement
Donald Trump wants to keep leverage to enter the second phase of negotiations. It will include difficult subjects such as technology transfer. The United States accuses China of stealing American technology .
The agreement does not address cybersecurity issues or even the processing of computer data to which Chinese companies have access. Another thorny question remains: that of the subsidies granted by Beijing in particular to the steel sector and the construction of solar panels.
The Americans believe that this state aid allowed the Chinese to flood the United States with products below market prices. And that they have damaged the American industry. Phase 2 of the agreement, which will take some time to be negotiated, should address all of these aspects. The administration has already warned that it did not think it could succeed before the elections of next November.
► Read also: [Infographic] The China-United States trade war in five episodes
A political victory for Trump in the campaign
The American president will not fail to exploit this political victory during his campaign after two years of trade war. Even if there is still a lot to negotiate. This victory is essential within a year of the presidential election.
Donald Trump said at the start of his term that trade wars are easy to win. He engaged in a showdown that ultimately lasted two years and cost the American economy dearly.
"Unlike those who came before me, I kept my promise." - President @realDonaldTrump pic.twitter.com/mYdmGXlich
The White House (@WhiteHouse) January 15, 2020The agricultural sector has been hit hard by this conflict. He was directly targeted by Chinese reprisals after the taxes were imposed by the United States. For example, US soybean exports to China have collapsed. The farmers , who constitute a crucial electorate for Donald Trump, were starting to get impatient.
In the manufacturing industry, many workers who once voted Democrats carried Donald Trump to the White House hoping he would fight for them. They also suffered the commercial conflict initiated by the president. Exports of U.S. products to China fell 11% in 2019, a loss of $ 100 billion.