The president of the United States, Donald Trump, and the Chinese vice-president Lui He have signed today in the White House phase 1 of their commercial agreement, a first step in their truce that arrives not without suspicion between both parties.
Trump has called this first step a "crucial" thing and has even joked with a possible visit to China "in the not too distant future."
Finally, in the middle of Wednesday afternoon, the two kings of the world economic board shook hands. In Washington, in front of 200 guests, a signature was staged to seal the truce in a commercial war in which the entire world has lost out. On one side, the president of the United States, Donald Trump . On the other, on behalf of Chinese leader Xi Jinping, China's smartest pawn, Deputy Prime Minister Liu He, elected by Beijing to lead the negotiations during the 21-month trade war and relentless tariff escalation.
The so-called "Phase One" of the agreement has already been initialed in 86 pages. That "big and beautiful monster," as Trump has defined it, will cause the United States to reduce additional tariffs on Chinese products worth $ 120 billion. In return, China is committed to acquiring manufacturing goods, energy and services worth 200,000 million for two years and to buy agricultural products for 50,000 million .
"Today we take a momentous step, one that had never been with China before. Together we are straightening the mistakes of the past," Trump said in a massive press conference in the East Room of the White House. The president has even joked with a possible visit to China "in the not too distant future."
Although the level of tension between the two powers has been lowered, this first phase will still maintain US tariffs of 25% for Chinese imports valued at 250,000 million dollars - together with reduced levies of 7.5% for additional imports that affect almost two-thirds of what comes to the United States - which has caused the price of certain items such as computers, mobiles, televisions or baseball caps, bicycles and shoes made in China to have skyrocketed.
"The trade war is not over yet, this is only the first round of a game." This is the message that was launched a couple of days ago from Beijing asking for caution in the face of optimism following Wednesday's signature. This was also expressed by a note in the economic newspaper of the Communist Party, the Economic Daily : "The United States has not revoked all its tariffs and China is still implementing its retaliatory measures. This is only the first step in solving a problem . " Although the Chinese negotiator in Washington, Liu He, has said after signing that both countries "will work together to achieve tangible results."
In the Asian giant, during these months of trade war, in which the value of exchanges between the two countries (up to 541.223 million dollars) has been reduced by 14.6%, silence has prevailed in the main state newspapers. And Chinese censors have blocked any unauthorized information about a possible deal in the media, including messages on President Trump's approach to Twitter. Although from Beijing they saw it as a good gesture that on Monday the US Department of the Treasury would eliminate the designation of China as a "currency manipulator" country, a list in which those nations that "incur in unfair practices" appear.
The economic analyst Zhou Xin wrote in the South China Morning Post that, on the one hand, this ceasefire has been hailed within China as a positive step for its economic outlook, but on the other the controversy persists over what it has had to cede the Government to reach this agreement. "China is trying to project the agreement as proof that it is able to prevent disputes with the United States from becoming confrontations while minimizing the parts that could be seen as Beijing concessions," Xin wrote. Within the Asian power many have not liked that this firm means that China will open its markets to state-owned companies related to banking or insurance.
Trump used tariffs as a negotiating strategy, pressing Beijing to accept a new trade agreement that addressed unfair commercial practices, such as intellectual property theft and forced technology transfers. It should not be forgotten that this trade war has caused the 1% drop in trade in the Asian country in 2019, compared to the 12.6% increase recorded the previous year. And its economic growth slowed to its lowest level in almost three decades.
But taxes have also hurt Americans. A Moody's Analytics report indicates that the commercial war with China had a cost of 300,000 lost jobs until last September. A joint investigation by the universities of Princeton and Columbia, estimated that these tariffs would cost households $ 831 a year. Also, an analysis by the company Tariffs Hurt the Heartland adds that US companies have paid $ 46 billion more in tariffs than they would have disbursed without Trump's taxes.
There is already a first signature on paper. And a handshake at the White House. The final agreement, no doubt, is closer. Although the stock exchanges have lived with skepticism this moment and on Wednesday dawned in negative. Because the tariffs remain in force and the taxes will remain until another meeting is held for "Phase Two". As long as Beijing fulfills its word embodied in the documents.
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