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Thursday, October 22, 2020

US, China sign trade deal to ease tensions

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US China Trade Deal: Wall Street Journal: The U.S. and China signed a trade deal that officials say will lead to a sharp increase in sales of U.S. goods and services to China, further open Chinese markets to foreign firms—especially in financial services—and provide strong new protections for trade secrets and intellectual property.

The eight-part agreement acts as a cease-fire in a two-year trade war that has roiled markets world-wide and cut into global growth. But it leaves in place U.S. tariffs on about $370 billion in Chinese goods, or about three-quarters of Chinese imports to the U.S.

Possible tariff reductions will be left to later negotiations, which will cover a host of difficult issues at the heart of the trade battle, including Chinese subsidies to domestic companies and Beijing’s oversight of Chinese state-owned firms. Those talks are expected to begin fairly soon but not conclude until after the U.S. presidential election in November.

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Speaking to a packed audience of business and political leaders in the East Room of the White House, President Trump said the remaining tariffs “will all come off” if the talks produce a second agreement. He called the deal a “momentous step—one that has never been taken before with China—toward a future of fair and reciprocal trade.”

Vice Premier Liu He of China, who signed the agreement for Beijing, played up the need for both countries to act together to tackle challenges such as terrorism, aging and environmental protection.

“China has established a political system and an economic-development model that suits its own characteristics,” Mr. Liu said. “But that doesn’t mean China and the U.S. can’t work together.”

While the deal contains wins for the U.S., the fact that most tariffs will remain on Chinese imports clouds prospects for growth in business investment between the two countries, said John Frisbie, a China expert at the trade consulting firm of Hills & Co.

“Overall uncertainty is not reduced much because there is no removal of existing tariffs [and] questions whether China can buy the quantities of goods and services the administration wants,” he said on the US China trade deal.

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