Photo: Getty the Plan trump on the war with China didn’t work
The signing of the first phase of the new agreement is scheduled for January 15. Experts doubt the feasibility of its provisions.
In the main battle of the American leader Donald trump was declared a truce: the biggest trade war of modern times, paused, and economists count the losses. So far, America looks like a loser.
January 15 will be signed the first part of a new trade deal between the US and China. Against the background of improved relations, the US Treasury Department has removed China from the list of currency manipulators. Корреспондент.net tells details.
The feasibility of the transaction in question
On 13 January, the Treasury Department released a semiannual report on macroeconomics and monetary policy U.S. trading partners, in which China is no longer seen as a country of manipulating currency.
In its report, the US Treasury stated that China had assumed “the obligation to refrain from competitive devaluation” and agreed to publish the relevant data on exchange rates and external payments in the preliminary bargain.
The decision was made amid a visit to Washington by a senior Chinese delegation on the eve of the signing on Wednesday of a preliminary trade agreement between the countries. It is a sign of easing tensions between the two countries after a nearly two-year trade conflict.
In August of last year, trump was suspected Beijing of manipulating the yuan. It happened after the exchange rate of the national Chinese currency fell to the lowest level in decades. The people’s Bank of China, in turn, pointed out that does not use the exchange rate to win in trade disputes.
A month earlier, the two countries reached agreement on trade-truce. Later, the United States confirmed that the first part deals with China to be signed in January 2020, after which negotiations will begin on the second part of the agreement.
In December 2019, the Ministry of Commerce of China has announced that it has agreed with the United States the text of the first economic and trade agreement, which provides for the gradual abolition of the American duties on Chinese goods. After some time, confirmed this information in Twitter, and trump.
Reuters January 14 reported the details of the first part of the bargain. It provides for the obligation of Beijing on additional purchases of American goods worth over $ 80 billion within two years.
We are talking about additional purchases by 50 billion in the energy sector, and 33 billion in the agricultural sector. China also agreed to spend $ 35 billion on purchases in the U.S. services sector.
At the same time, Washington will maintain its 25 per cent duty, which will affect the exports of Chinese goods to $ 250 billion, but half will reduce the existing duties, which affect the goods of the Chinese export volume of $ 120 billion.
When interviewed by Agency analysts believe that the fulfilment of such terms of the transaction is unrealistic.
Three wars. That will hit the economy in 2020
According to experts, China has assumed a vague obligations concerning intellectual property protection and liberalization of the financial services market. Perhaps it will be spelled out in the second part, which now has two governments.
The world has lost $ 700 billion
For eighteen months the American President has imposed duties on Chinese imports in the U.S. at 370 billion dollars a year. The effect is slow, and only now the economists have been able with some precision to bring the first results.
They have led to increased costs, and employment and production in industry. And contrary to the theory not forced China to reduce prices and suffer losses. All the burden of the additional costs fell on the shoulders of the U.S. importers who either missed profits, or to shift costs to consumers, raising prices.
For Chinese suppliers, partially the negative effect of duties was offset by the weakening of the Chinese currency: in two years the exchange rate of the U.S. dollar weakened by 11 percent, including since the beginning of this year, more than three percent.
The international monetary Fund says the us-China trade dispute causes the downfall of the global economy. The Foundation estimated that a trade war trump has already cost the planet at $ 700 billion.
It is primarily lost revenues from unrealized economic growth: if not for the war, the world would be richer by approximately this amount.
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