China and the United States signed a partial agreement on Wednesday (15.01.2020/XNUMX/XNUMX) to overcome trade disputes between the two countries, but analysts believe a fragile truce after months of a crisis that shook the global economy.
The document, called "first stage agreement"It was signed at a ceremony at the White House and is the result of a limited engagement between Washington and Beijing as both countries fear the economic and financial consequences of a prolonged trade war.
Under the agreement, China agrees to import a total of US$200 billion (180 billion euros) worth of US goods, including agricultural products, to reduce the trade deficit between the two countries.
At the same time, Beijing pledges not to manipulate the value of the currency or protect the intellectual property of American companies in exchange for a partial suspension of Washington's customs duties on goods imported from China.
However, the deal does not reverse most of the punitive taxes imposed by the United States on $360 billion (323 billion euros) worth of imported goods from China and excludes far-reaching reforms to China's economic system, including subsidies to domestic companies, while protecting them from foreign competition.
The United States will thus maintain additional tariffs of 25% on $250 billion (almost 225 billion euros) of goods imported from China and 7,5% on another $120 billion (almost 110 billion euros).
Also The signing of the document is unlikely to suspend the strategic rivalry between the two powers., which increased during the presidency of Donald Trump and extended to defense and high-tech issues, including fifth-generation telecommunications networks (5G) or artificial intelligence.
"The signing of this truce, while welcome, does not change the reality that the two countries are in increasingly antagonistic positions."Rand Corporation analyst Ali Wyne was quoted as saying by the Financial Times.
«Washington views Beijing's economic upswing as a threat to the country's security and that of its allies and partners. Meanwhile, Beijing sees accelerating local innovation and opening up alternative export markets as key.", He said.
On the agenda is the “Made in China 2025” plan, which aims to turn Chinese state-owned companies into technological powerhouses with capabilities in high value-added sectors such as artificial intelligence, renewable energy, robotics and electric cars. Washington believes the plan violates Beijing’s commitments to open up the market.
The Chinese government wants a quicker elimination of tariffs after the deal, but the US administration has resisted in an attempt to ensure China honours its commitments. Trump suggested leaving a second phase of negotiations after the US presidential election in November 2020.
On the eve of the deal's signing, the U.S. Treasury Department withdrew its designation of China as a currency manipulator, which it put in place when tensions escalated last August.
The announcement came just as Chinese Vice Premier Liu He landed in Washington.
U.S. officials have also shifted rhetoric toward China to a more conciliatory tone.
In negotiating the deal with China, Robert Lighthizer said in an interview that the goal was not to decouple the two economies, but to rewrite “the rules” so that they worked for both countries.
"People can talk freely, they don't bother me. I think the president has a vision. He made us work hard and we took a big step."", He said.
Source: Reuters
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