The monetary agreement contains Commitments from China to abandon competitive currency devaluations and not to steer its exchange rate towards a trade advantage – a language that China has accepted for years as part of its commitments to the Group of 20 major economies. Trump`s agreement is intended to facilitate the identification and punishment of theft and counterfeiting of intellectual property. For example, several provisions relating to the protection of confidential information are added, considered trade secrets and which, according to AMERICAN companies, are not well protected by Chinese law. These safeguards also include “electronic intrusions,” a reference to hacking computer systems. In a message to Trump, Chinese President Xi Jinping said the agreement was “beneficial to China, the United States and the world.” Xi also said the agreement shows that both countries can find appropriate and effective solutions to problems “on the basis of equality and mutual respect through dialogue and consultation.” While U.S. businesses and farmers welcome these commitments, China only agrees to make purchases for the next two years, and what happens next is vague. The agreement stipulates that countries “progthea” that the increase in purchases would continue until 2025. The shopping list also leaves some questions unanswered: what will happen to China`s contracts with other countries for products such as soybeans? Will purchases distort commodity markets? 2. On July 6, 2018, the Trump administration imposed its first tariffs on $34 billion worth of Chinese goods. China returned the favour at the same time.
The two countries have imposed tariffs until September 2019, together covering more than $450 billion in bilateral trade. The January 2020 agreement applies to U.S. exports of goods and services. Because detailed data on high-frequency trade for services are not available, these commitments are not assessed here. In September 2019, Matthew Shay, President and CEO of the National Retail Federation, said the trade war had “taken far too long” and had had a negative impact on U.S. businesses and consumers. He called on the Trump administration to end the trade war and reach an agreement to remove all tariffs.  Regarding energy purchases in the agreement, Trump told Senator Joni Ernst, the Iowa Republican who was present, “You had ethanol, so you can`t complain.” A senior Trump administration official said the currency agreement was based on provisions of the U.S.-Mexico trade agreement, which require the three countries to disclose monthly data on international reserve balances and foreign exchange market interventions, as well as quarterly balance-of-payments and other government reports to the International Monetary Fund. The agreement provides the United States with certain benefits in financial services, including electronic payments, securities, fund management and insurance, but many of these changes were already underway. Already in 2017, in its attempt to ease tensions with the Trump administration, China had tried to give foreign companies greater supremacy in its financial sector, and U.S. banks and other companies held majority stakes in Chinese companies.
Today, we are taking an important step that china has never taken towards a future of fair and reciprocal trade, as we sign the first phase of the historic U.S.-China trade agreement.