The Pak Banker

US-China Trade Deal

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Trade relations between the US and China finally appear

to be heading in a positive direction as the Trump

administra­tion reversed its move to officially designate

Beijing as a currency manipulato­r. This is one of several measures

taken by both sides just days before they sign what has been dubbed

the “phase one” of a new trade deal.

According to this agreement, China will buy more agricultur­al

goods – up to $ 40 billion per year from the previous high of $ 27

billion – and crack down on intellectu­al property thefts. The $ 40

billion figure has been a key point from President Trump’s side as

he has promised this boost to his voters from the farming industry,

but experts question whether China can actually manage to import

these vast sums without oversupply­ing its markets.

Intellectu­al property rights have taken centre stage as both

countries compete for supremacy in the internatio­nal technologi

cal market. Advancemen­ts in Artificial Intelligen­ce and 5G and

their strategic capabiliti­es entails that the US wants the ability to

be able to raise its grievances against China in the event of any

perceived misconduct. Having said that, this clause in the trade

deal has also been touted by many as too weak from the US per

spective, which questions

bilateral trade relationsh­ip.

itive internatio­nally.

trading rivals lasts.

exactly what progress

the Trump

Administra­tion really made in its efforts to get ‘more’ out of this

For China, the boon will be seeing the tariffs currently imposed

by the US cut to half, alongside an agreement to not impose any

additional import taxes. Whether both sides manage to hold up

their end of the bargain remains to be seen the deal isn’t really

enforceabl­e in any way but the reception to this treaty has been pos

This is an end or at least a pause to the trade war, which has

been ongoing since 2018. Global markets will not have to consis

tently manage expectatio­ns and look to anticipate how either coun

try will retaliate. We can only hope that this peace between the two

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