China and US sign first phase deal to reduce trade tension
January 16, 2020 | Investopaper
The two economic powerhouses, the US and China, who have been going through a trade war since 2018 finally signed a first phase trade deal on Wednesday. The agreement was made at the White House as both countries appreciate the first phase agreement.
US President Donald Trump said that the agreement would be transformative for the US economy. Chinese leaders also called it a win-win deal and admitted that it will help to maintain a good relationship between the countries.
As a part of the deal, the US will reduce the new tariffs on the Chinese goods to half while China has agreed to purchase an additional $200 billion in US goods over the next two years. The US will maintain up to 25% tariffs on an estimated $360bn worth of Chinese goods. China will also take more action against counterfeiting.
Although the first phase deal has been struck, still there remains a majority of border taxes that need to be resolved through further talks. The trade war has hit the economy of both countries and dampen global economic growth since 2018.
