US and China to lower tariffs from Friday as phase one trade deal takes effect
The US and China will lower tariffs on each other’s goods today, marking the start of the Phase One trade deal between the two countries.
Washington has promised to cut tariffs in half on $120 billion of Chinese technological products, toys and clothing. In return Beijing has agreed to buy $200 billion more US farm, manufactured, and energy goods and services. It has also pledged to address some US concerns over intellectual property theft by strengthening legal protections for foreign companies operating in China.
The trade war between the world’s largest economies, initiated by President Trump to reduce the US-Chine trade deficit, has had largely the opposite effect, harming key agricultural and raw material sectors. While the US trade deficit with China shrank in 2019, the total US trade deficit in manufactured goods remained relatively unchanged as the US switched to other suppliers.
The Phase One deal is an attempt to increase bilateral trade and reverse this backslide as tariffs are harmful to both counties’ economies. The plan is expected to continue under a Phase Two, which would work to assuage the trade war in the medium to long terms by progressively lowering tariffs.
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