Tariffs - in some cases at a lower rate - will remain in place. Analysts say it's unlikely that the deal will produce gains sufficient to
outweigh the losses already suffered.To get more news about
China, United States sign phase-one trade deal, you can visit shine news official website.
We take a look at the winners and losers from the deal.Some critics say
there is little substance, but the signing offers an opportunity for US
President Donald Trump to put the trade war behind him and claim an
achievement heading into the 2020 presidential election.
That may be a relief: Polls show that most Americans agree with the
president that China trades unfairly, but they generally support free
trade and oppose tariffs. Indeed, Republicans lost several congressional
seats in 2018 - a change economists have linked to the trade war.China
appears set to emerge from the signing having agreed to terms it offered
early in the process, including loosening market access to US financial
and car firms. In many cases, companies from other countries are
already benefiting from the changes.While President Xi can claim he did
not simply bow to America's demands, that doesn't mean the Chinese are
celebrating. The Federal Reserve estimates that China's economy has
taken a 0.25% hit, as US demand for its goods fell by about a third.
The new deal halves tariff rates on $120bn worth of goods, but most of
the higher duties - which affect another $360bn of Chinese goods and
more than $100bn worth of US exports - remain in place. And that's bad
news for the American public.
Economists have found that the costs - more than $40bn so far - are
being borne entirely by US companies and consumers. And that figure does
not even try to measure lost business due to retaliation.
Overall, the Congressional Budget Office estimates that tariff-related
uncertainty and costs have shaved 0.3% off of US economic growth, while
reducing household income by an average of $580 since 2018.
The CBO's estimates take into account all new tariffs imposed since
January 2018 - not just those involving China - but analysts say a more
limited look would yield similar findings.The new deal commits China to
boost purchases in manufacturing, services, agriculture and energy from
2017 levels by $200bn over two years.
Mr Trump has said that could include as $50bn worth of agricultural goods a year.
But the official figures are lower, analysts are sceptical those are
attainable and China has said the purchases will depend on market
demand. So far, the primary effect on business has been pain.Farmers,
who have been targeted by China's tariffs, have seen bankruptcies soar,
prompting a $28bn federal bailout.
Among manufacturers, the Federal Reserve has found employment losses,
stemming from the higher import costs and China's retaliation.
Over the long-term, American firms may reroute supply chains away from
China to avoid the tariffs - but that's an expensive prospect.Globally,
economists estimate that the trade war will shave more than 0.5% off of
growth. But some countries have benefited from the fight, which
redirected an estimated $165bn in trade.
Analysts at Nomura identified Vietnam as the country that would gain the
most, while the UN found that Taiwan, Mexico and Vietnam saw US orders
ramp up last year.
The Fed found that the increased American imports boosted Mexico's
economic growth by just over 0.2%,The US has said that China has agreed
to new protections for intellectual property, including lowering the
threshold for criminal prosecution and increasing penalties. Critically,
the two sides say they have agreed to a way to resolve such disputes.
Those were among the issues that ostensibly triggered the trade war.
But analysts say it's not clear if the new commitments are any different
from promises that China has made before. And the new deal does not
address some of America's chief complaints about China's trade practices
- such as the subsidies it provides to certain industries.
The White House has said it will tackle additional issues in a second,
"phase two" deal but analysts say they don't expect anything concrete
anytime soon. The administration has also discussed how to address the
subsidies with Japan and Europe.
