The United States and China have reached a Phase One trade deal that will begin to hold China accountable, establishes enforceable reforms to intellectual property, and will reduce tariffs and trade barriers.
This deal is a huge accomplishment for President Trump and is further proof that he has followed through on his campaign promise to renegotiate better trade deals for Americans workers and families.
The Phase One deal protects intellectual property and ends forced technology transfers. China’s intellectual property theft has been harming American workers and businesses for years and has been at the forefront of tensions between the two countries since the Trump administration began investigations in 2017.
Practically every sector of the economy has accused China of stealing trade secrets and software including automobile manufacturers, consumer electronics, and biotech and pharmaceuticals. The protections included in the Phase One deal are a monumental win for American innovators and companies.
The agreement will also begin to roll back tariffs with Both China and the U.S. agreeing to not impose planned tariffs that would have gone into effect on December 15. However, the 25 percent tariffs on about $250 billion of Chinese imports will remain, as well as 7.5 percent tariffs on about $120 billion.
The deal also reduces the trade imbalance with China, who has agreed to purchase more U.S. exports of agriculture, energy, and manufactured goods, among many others.
This trade agreement further builds upon the success of the Trump administration in ensuring free trade that benefits Americans across the country.
The administration has also negotiated a trade agreement with Japan that will ensure that 90 percent of U.S. products are tariff free or will receive preferential tariff access. Trump has also replaced the 25-year old NAFTA with the modern United States-Canada-Mexico Trade Agreement (USMCA) which, if passed by Congress, will raise GDP by $68.2 billion and create approximately 176,000 American jobs.
While this China-US agreement is a win, more needs to be done to ensure robust and fair trade with China. Fortunately, President Trump has stated Phase Two negotiations will begin “immediately.” Among the outstanding items remaining, both countries should ensure that existing tariffs are removed.
Regardless, the Phase One China trade deal is a further win for President Trump in ensuring American businesses and workers can compete overseas and that the U.S. economy continues to thrive.