The signing of a partial trade agreement between the U.S. and China means goods and services will flow again, but uncertainties could still weigh on the global economy in 2020, according to reports Wednesday (Jan. 15).
President Donald Trump said the tariffs “will all come off” as long as the two countries enter into a second agreement. Trump proclaimed that “Phase One” of the deal is an important milestone.
The deal includes commitments by China to buy $200 billion of U.S. goods, including some $50 billion in agricultural products over two years.
“Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade as we sign Phase One of the historic trade deal between the United States and China,” Trump said.
Chinese Vice Premier Liu He signed the agreement for Beijing.
“China has established a political system and an economic development model that suits its own characteristics,” Liu said. “But that doesn’t mean China and the U.S. can’t work together.”
There is no timetable for further talks, and the agreement is not expected to be finalized before the U.S. presidential election in November.
Treasury Secretary Steven Mnuchin told CNBC that Trump could reimpose tariffs in the event that China reneges on its commitments.
Microsoft President and Chief Legal Officer Brad Smith expressed concerns that the trade tensions between China and the U.S. could lead to a technology “cold war,” according to Bloomberg.
“The Chinese market is not and has never been fully open to U.S. companies,” Smith said, adding the strains with China are bipartisan and the next presidential election won’t change that. He questioned whether “the two countries are heading to a technology cold war.”
In other China-related news, the country is in the process of finalizing its first rules for online-only banks. The rules come at a time when data privacy is a hot topic and artificial intelligence and online banking technologies alter China’s financial services terrain “from processing payments to selling investment products.”