The U.S.-China Attained Trade Deal, But Some Major Details Are Still Vague

Following the announcement of progress about the trade deal amid the U.S. and China, a decisive point of the deal still remained in question: agricultural purchases. The two-sided trade is a major part of the argument between the world’s two biggest powerhouses, particularly after both the countries decided to break the conciliations into phases, instead of tackling a swing of American apprehensions which range from the trade shortfall in goods to state control in the financial system. In the last week, both sides held separate press conferences to declare that they attained a professed phase one agreement. President Donald Trump stated the Chinese will purchase $50 Billion in agricultural purchases shortly.

More precisely, Reuters stated Robert Lighthizer, U.S. Trade Representative, told reporters that China will purchase at least $16 Billion more agricultural commodities in each of the coming 2 Years. The article stated that it can bring total procures to almost $50 Billion in 2020 and 2021. In a note, Ting Lu, Chief Economist (China) at Nomura, said, “That scale of procures seems doubtful and Chinese executives were disinclined to mention any exact target in their press conference.” Trade amid China and the U.S. has fallen since both sides imposed tariffs on billions of dollars’ of goods of each other. In the last year, China ranked fifth of main destinations for the U.S. agricultural exports at $9.2 Billion—which is down from second place a year ago—as per the U.S. Department of Agriculture FAS (Foreign Agricultural Service).

On a related note, the U.S.-China trade deal has made a huge American deficit and an enduring collision course. Seeing at the new US-China trade figures, one wonders how the deal declared in the last week can lead to a satisfactory balance of tow-sided trade accounts. China’s surplus on its American goods trade in the first 10 Months of 2019 was almost $294.5 Billion and totaled to 40% of the US’ total trade gap.

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