This article
discussed President Trump’s potential trade deal with the President of China,
Xi Jinping. The Chinese delegation visited this past Thursday and Mr. Xi is scheduled
to come next month to discuss the agreement himself. Trump believes China’s
President is willing to have Beijing purchase more products as well as open
more of its market to American companies. This was emphasized in the letter Mr.
Xi sent to Trump, with promises of buying American agricultural products. The
main product of discussion was soybeans, and according to China’s Vice Premier
and Beijing’s trade negotiator Liu He, Mr. Xi “was committed to buying five
million tons of soybeans.”
Within 90-days,
the trade truce will end and bring an increase of 25% on Chinese import tariffs.
The article brought to light that with this heavy pact on the two nations
shoulders, economic growth and profits are being affected negatively on both
sides. The article stated the reason for the U.S. wanting China to buy large
amounts of American goods and services is to help decrease the American trade
deficit along with helping change the fact that to do business in China, they
require American companies to impart trade secrets. There appears to be desire
for ending the trade war as prices increase on Chinese imports, and tariffs trouble
American companies and manufacturers. However, China also appears to be
disinclined to negotiate “technology transfer and subsidies of state-owned
enterprises.”
Although
this deal appears to be something with promise, we do have to take into
consideration what Robert Lighthizer, President Trumps chief trade negotiator, has
to say on the matter. He believes that because the two leaders had not even come
to an agreement over a draft framework for the deal they seek to accomplish in
the period before March 1st, along with there being no discussion on
American tariffs on Chinese goods, that maybe it is too early to celebrate the
deal despite the “main achievement” that the talks were even taking place. He
also believes that the main issue lies with making sure that the Chinese
commitment is guaranteed and that there need to be mechanisms to make certain of
this. Also, the article mentioned the American Farm Bureaus economist’s knowledge
that the U.S. exports 35 million tons of soybeans to China yearly, so offering to
buy 5 million more, does not seem as impressive as before. I am curious as to
what the true trade deal will look like after Mr. Xi visits next month, but
until then we will just have to wait.
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