The US-China Phase One trade deal to be signed today in Washington will not end tariffs on Chinese goods exported to America until after the US presidential election so that the US can verify China’s adherence to the terms of the deal, according to analysts.
The contents of the deal published this week revealed the extent of the conditions laid out by US President Donald Trump. Unreleased portions of the annex with specific purchase amounts is believed to contain China’s promise to purchase nearly $200 billion of US goods in the next two years, according to analysts.
A breakdown of the purchasing commitment is believed to include $80 billion in manufacturing goods, $53 billion in energy and around $30 billion each in the agriculture and financial services sectors.
The deal also explicitly states that China will stop its practice of mandating foreign companies to provide Chinese companies with intellectual property for operating in China.
“For the first time in any trade agreement, China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government,” added the fact sheet.
Asian shares soared to levels unseen since 2018 and before the escalation of the US-China trade war this week as the Phase One trade deal is near finalization.
The US-China Phase One trade deal has put a halt to one of the costliest trade wars in human history and brought the first signs of de-escalation in the 17-month trade war between the world’s two largest economies.