While the U.S.-China trade war has yet to come to an end, a new agreement has been inked between the two leaders of the world economy. Dubbed as “Phase One” of the trade agreement between China and the U.S., this new deal establishes commitments from both sides to walk back some of the tariffs that were put into effect over the past 18 months of the trade war.
Phase One Trade Agreement Rundown
Signed on January 15, 2020, in the East Room of the White House by U.S. President Trump and Chinese Vice Premier Liu He, the phase one trade agreement outlines expectations from both countries over the next two years through 2021. Some of the key agreements include:
China Agrees to Increase Imports from the U.S.
Specifically, the U.S.-China trade deal contains a commitment from China to import no less than $200 billion worth of goods and services from the United States by the end of 2021. Specific amounts of goods and services from different trade sectors are broken down within the agreement.
U.S. and China Agree to Reduction of Tariffs
As part of this new deal, China has agreed to cut tariffs and levies on many U.S. goods in half. Likewise, the U.S. will also lower tariffs on roughly $120 billion of Chinese goods from 15% to 7.5%.
China Agrees to Strengthen Intellectual Property Protection
The trade agreement establishes expectations for China to create an “Action Plan to strengthen intellectual property protection” within 30 days. The agreement also mandates that China takes steps to put a stop to the rampant sale of counterfeit goods in the Chinese marketplace.
This trade agreement signifies a sort of ceasefire between China and the United States in the ongoing trade war between these nations. Mentions of continued talks and the negotiation of a “Phase Two” for this agreement have been made dependent upon the satisfactory execution of the current agreement.
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