Agreement Between United States And China

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The trade war between China and the United States has weighed on the economies of both countries. Tensions appear to have led to a slowdown in U.S. manufacturing. Chinese exports to the United States have collapsed. The deal was attacked by Democratic leaders, including Senator Chuck Schumer of New York, who criticized the deal for failing to address Chinese state-owned enterprises and industrial subsidies. He suggested that President Xi was laughing privately from the United States and that China had “brought President Trump to the cleaning staff.” All these obstacles and complications lead to political failure. Regardless of who is president, the United States must get China to liberalize its tariffs, reduce non-tariff barriers, and streamline its subsidies and other practices that distort economic incentives. In response to Trump`s trade war, China imposed additional tariffs on more than 50 percent of U.S. exports in 2018 and 2019. It is mysterious that the legal text of the first phase of the agreement did not remove, reduce or even mention the word “tariffs,” and it did little to address the major trade problems that the United States has with China.

Instead, the Trump administration has provided an excellent case study on why simple purchase commitments can`t go around. Not only does not rely on purchasing objectives address China`s problematic policy, which harms Americans, but it also helps to consolidate government planning, contrary to market results. In particular, because China continues to impose discriminatory retaliatory duties on U.S. exporters, only its state-owned enterprises, not the Chinese private sector, will increase many purchases to meet their commitments, the opposite of what U.S. politicians say they want. The objectives of the agreement also send signals to America`s allies that the United States is primarily interested in China diverting imports from its suppliers, rather than attacking China`s problematic policies and undermining their confidence in U.S. policy. But the deal has a lot of criticism on both sides that Mr. Trump`s tactics have been economically damaging and that the deal leaves many important economic issues unresolved.