Friday, August 12, 2022

Trade: draft agreement between China and the United States

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Martin Haglin
Martin Haglin
Martin Haglin was born and raised in Conneticut. Martin has worked as a journalist for nearly a decade having contributed to several large publications including the BBC World and CNET. As a journalist for Business News Ledger, Martin covers state news, Finance and human interest stories.

After two days of negotiations, Beijing appears to have agreed to buy more American goods and services.

After two days of intense negotiations, an agreement appeared to emerge Friday night between the United States and China on trade.

According to the reports, Beijing would have agreed to buy more US goods and services , without formally committing to reduce the trade deficit with the United States by $200 billion by 2020, as the House hoped. white. No details of the agreement have yet been made public.

Strained context between the two countries

The Chinese delegation that went to Washington this week was ready to drop the ballast to reduce tensions between the two countries.

Trump’s economic adviser, Larry Kudlow, said she had agreed to buy more farm, energy, and financial services. He assured that Vice Premier Liu He, present in the Chinese delegation, made a big impression in Washington, presenting him as “a smart guy, a guy who understands the markets.”

The discussions are part of a tense environment between the two countries. In recent months, the Trump administration has raised taxes on solar panels, steel or aluminum Chinese, and threatens to punish the equivalent of $ 50 billion of additional goods as early as next week.

Measures that China has responded to by taxing US agricultural products, cars and planes.

Trade deficit at the heart of tensions

At the beginning of May, an American delegation went to Beijing in the hope of reaching an agreement , but the discussions did not succeed. At the heart of the dispute: the large trade deficit between China and the United States, which amounted to $375 billion last year (excluding services), and widened further in the first quarter.

The two countries are negotiating on several cases in parallel, including the dispute over the Chinese telecom giant ZTE, which is subject to US sanctions , while China has imposed heavy taxes on US agricultural products, which penalize farmers in the US. mid-west.

Earlier this week, Trump made a move, promising to give ZTE access to the US market while Chinese regulators have authorized the acquisition of a division of Toshiba by the Bain Capital fund for $ 18 billion, a transaction blocked for several months. The latter also promised to authorize the acquisition of NXP Semiconductors by the US chip maker Qualcomm. On Friday, Beijing finally agreed to suspend an anti-dumping measure taken in April against imports of US sorghum.

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