US-China trade deal truce

The Korea Times - - OPINION -

Pres­i­dent Trump has an­nounced a trade deal with China that he called “tremen­dous’’ or “tremen­dously’’ pos­i­tive 15 times. The de­tails look far more mod­est to us, but this truce in the trade war beats the al­ter­na­tive of es­ca­lat­ing tar­iffs that have al­ready caused a sig­nif­i­cant global eco­nomic slow­down.

Trump said China will make some $40 bil­lion to $50 bil­lion more in agri­cul­tural pur­chases over two years and has promised to bet­ter pro­tect in­tel­lec­tual prop­erty and wel­come more for­eign fi­nan­cial ser­vices. In re­turn the U.S. won’t in­crease tar­iffs to 30 per­cent from 25 per­cent on $250 bil­lion of Chi­nese goods as Trump had planned.

The two coun­tries also agreed to keep talk­ing to­ward what Trump called a “phase two’’ agree­ment that would in­clude the tougher issues such as Chi­nese tech­nol­ogy theft and preda­tory reg­u­la­tion against Amer­i­can com­pa­nies. There will also be a new con­sul­ta­tion process to ad­dress dis­putes and mon­i­tor en­force­ment.

In essence both sides sued for a tem­po­rary peace to fore­stall fur­ther eco­nomic dam­age. China avoids a tar­iff es­ca­la­tion that has been hurt­ing its ex­ports and in­duced Bei­jing to im­pose cap­i­tal con­trols to avoid cap­i­tal flight and a run on the Chi­nese yuan.

Trump de­serves credit for chal­leng­ing China’s abu­sive prac­tices, but he’d be in a stronger ne­go­ti­at­ing po­si­tion had his tar­iffs not done so much to weaken the U.S. econ­omy. (AP)

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