China’s President Xi Jinping, takes his seat for the first closed session of the BRICS summit in Johannesburg, South Africa, Thursday, July 26, 2018. Putin arrived in South Africa Thursday, the last head of state to arrive for the Summit. (Mike Hutchings/Pool Photo via AP)
Some good news this morning.
Last night, news broke that President Trump had signed off on a new trade deal with China that will purportedly dramatically lower tariffs for both countries in exchange for China finally caving to some major demands.
The tentative agreement, which Trump refers to as “phase one” deal, codifies what was agreed to in principle in October. It will require China to significantly increase its purchases of U.S. agricultural goods, open its financial services sector and enact new intellectual property protections.
In exchange, Trump will cancel a 15 percent tariff that was scheduled for Sunday, people briefed on the matter said. The president is also expected to reduce duty rates already in place on about $250 billion worth of goods, including many consumer items such as footwear, clothing and flat panel TVs.
We’ll have to see the details, but on the surface, this looks like a pretty big win for the United States. All we are having to do is remove punitive tariffs previously put in place while China is having to further open its banking system and enact new intellectual property laws to protect U.S. products. I’m not sure how much of the agricultural buying is just making up shortfalls that resulted from the trade war itself, but it’s certainly good news as well.
I’ve been a major skeptic when it comes to China and tend to think we should extricate ourselves from the trade relationship over time. I think there will come a day when we regret helping enrich the biggest threat to the U.S. on earth. In the absence of that, though, because I know I’m the minority thinking that way, this deal looks to be a good one.
Further, it’s a win for the American people, as this should further stimulate an already booming economy, and just in time for the 2020 election. Taking this issue off the table is smart politically for Trump. It also pushes back on the impeachment fiasco that’s currently ongoing.
The mainstream press will find some way to spin this deal as a negative, but good for the President for getting it done.
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