Trump Says Phase 1 Deal to be Signed on Jan. 15

In December, the United States and China announced that they had reached a limited trade agreement. This deal, known as ‘Phase 1’, does not end the bitter trade war between the two sides, but certainly marks a thaw in trade tensions and is a step in the right direction. The trade war, which has seen the U.S. and China implement stiff tariffs on each other’s exports, has hurt the global economy and taken a toll on the manufacturing sectors in both countries. American farmers have also been hit hard by the trade war, which has resulted in the loss of close to two-thirds of their exports to China.

In December, President Trump said that work would immediately commence on Phase 2, but in the meantime, the markets are still waiting for the signing of Phase 1. Earlier this week, President Trump said that the agreement would be signed on January 15, but there has been no confirmation from Chinese officials. Phase 2 is expected to focus on the subsidies provided by the Chinese government. China has argued that subsidies are a matter of state sovereignty, so this issue promises to be difficult to resolve.

Under Phase 1, China has agreed to buy about $400 billion in U.S. goods and services over the next two years. This would nearly double the current value of exports. With Trump eyeing the 2020 election, the deal with China could mark a significant achievement for which he can claim credit while on the campaign trail.

Under the deal, China has agreed to protect intellectual property rights and prevent forced technology transfers. However, few details have been released about the deal, and we may be left in the dark until the agreement is actually signed.