With a ceasefire in the form of the first stage of a trade deal, after 18 months of a trade war, China and the US have emerged with a peace and a victory on both sides.
The talks between the business leaders at the annual world economic forum meeting of President Donald Trump at Davos, Switzerland indicated that there might be no phase two agreement until after the US election of November.
Even before China’s new coronavirus crises, Xi faced a slow economy that had not been supported by the war on trade, a renewed pro-democracy uprising in Hong Kong, and Taiwan’s humiliating anti-Beijing president, Tsai Ing-Wen, on 11 January.
The trade deal distracts Trump from a jury of the Senate. Even before the deal was signed, he said on October 11, a Lake Charles rally in Louisiana, that farmers needed more land and more tractors, in order to meet China’s demand.
The deal commits Beijing, this year and the next, to increase its imports of American manufacturing, oil and agricultural goods by $200 billion. It involves the procurement of soya and other agricultural products that are projected to reach 40 billion dollars a year, while critics are questioning if China will achieve the objectives.
When Xi and Trump both needed a win, it seemed like Trump was much more willing to strike a compromise on the street in Beijing. Commentators online suggested the power imbalance between the signatories. Vice Prime Minister Liu He of Xi’s top economic assistance signed the Trump Trade Agreement. Others suggested that Xi, who wanted to get away with the agreement, should be embarrassed.
Trump discussed on Sunday the Conference on New US Trade Agreements of the United States Farm Bureau Federation. “We did it,” Trump told in his campaign to enhance trade with China and with Mexico and Canada separately, a deal that was also signed last week in Austin, Texas.
Trump fired the first savage of the March 2018 trade war, setting Chinese tariffs with a view to changing what the U.S. calls “unfair trade practices,” such as a deficit in trade, intellectual property theft and forced American technology transfer to China.
The Trump Administration provided $28 billion in aid in 2018 and 2019 to farmers, but subsidies did not compensate adequately for losses, even though farmers earned more than the Detroit Big Three car manufacturers ‘ $12 billion in the 2009 rescue package.