President Donald Trump has claimed the success of his trade war with China with his January 2020 Phase One trade deal. In its self-proclaimed “historic” deal, China pledged to buy $200 billion worth of additional goods and services from U.S. industry in 2020 and 2021. Trump even boasted that the deal “could be closer to $300 billion once done.” While U.S. businesses and farmers are happy with these commitments, China is only agreeing to make purchases for the next two years and is vague about what will happen next. The agreement states that countries “expect the price” of the increase in purchases to continue until 2025. The shopping list also leaves a few questions open: what happens to China`s existing contracts with other countries for products like soybeans? Will purchases distort commodity markets? “A ceremony at the White House cannot hide the harsh truth about China`s Phase 1 trade deal: the deal does absolutely nothing to reduce China`s subsidies to its manufacturers,” Scott Paul, president of the Alliance for American Manufacturing, which includes manufacturers and the United Steelworkers union, said in a tweet. All those `forgotten men and women` in American factories have once again been forgotten. Today, we are taking an important step that has never been taken before with China towards a future of fair and reciprocal trade as we sign the first phase of the historic U.S.-China trade agreement. Together, we are righting the wrongs of the past and ensuring a future of economic justice and security for American workers, farmers, and families. And it will be a great deal for both countries. That`s more than $200 billion and will grow every year.

It also unites countries. Economists at financial firm Morgan Stanley have expressed uncertainty about the end of the trade war, but warned in June 2019 that it could lead to a recession. [321] If these talks cannot resolve the dispute, other tariffs will come into effect. In such a scenario, the other party promises not to take revenge with its own tariffs. If so, any country can announce it in writing and withdraw from the deal – quickly bringing both countries back into a trade war scenario. President Trump`s long-awaited trade deal with China includes significant changes in economic relations between the world`s largest economies. The deal gives the U.S. some gains in financial services, including electronic payments, securities, fund management and insurance, but many of these changes were already underway. In an attempt to defuse tensions with the Trump administration, China had already tried to give foreign companies more influence in its financial sector in 2017, and U.S. banks and other companies took majority stakes in Chinese companies. .