The ceasefire in the trade war between America and China is fragile

AMERICAN TRADE deals typically stretch to thousands of pages. The new “phase one” trade deal between America and China takes up only 86. Wang Shouwen, the Chinese deputy representative of international trade negotiations, described a text with nine chapters, including ones on intellectual property, technology transfer, financial services and dispute settlement. Robert Lighthizer, the United States Trade Representative (USTR) gave journalists a glimpse of it on December 13th, hours after it had been agreed. It is due to be signed by both sides in the new year.

Mr Lighthizer said that American tariffs on around $120bn of Chinese imports would be reduced from 15% to 7.5%. Fresh tariffs due on December 15th were cancelled. In return, he said, China would ramp up imports of American agricultural products, manufactured goods, energy products and services by $200bn over two years. Negotiators had set targets for various categories of commodities, so that agricultural purchases would rise from a baseline of $24bn in 2017 to at least $40bn in 2020 and 2021. The exact figures would be secret to avoid influencing markets.

These arrangements are sure to attract criticism. It is hard to see how China will meet its targets while sticking to the World Trade Organisation’s principle of non-discrimination. Joe Glauber of the...

via The Economist: Finance and economics Business Feeds

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