Six-month-long trade war looms over and the United States and China finally sign a treaty. The deal was signed between US President Donald Trump and Chinese Deputy Prime Minister Liu He on Wednesday at the White House in Washington. It is expected to bring some relief to the world economy at risk.
During the signing ceremony, businessmen, diplomats and senior government officials of the two countries were present. The BBC reported in a report online.
In a statement later, the US president said the deal would bring about change for the US economy. The agreement will further strengthen the relations between the two countries. Chinese leaders have termed it a ‘win-win’ deal, which will help build better relations between the two countries.
The US party referred to the deal as a major achievement. They see this as a renewed relationship between Washington and Beijing. Washington has also said that the deal contains things that could open the door to a new tariff on Beijing if China fails to keep its promise.
As a key condition of the agreement, China will buy $ 20 billion worth of goods and services from the United States in the next two years and strengthen the intellectual property law. China will buy $ 42 billion in the agricultural sector, $ 4 billion in manufacturing, $ 12 billion in energy and $ 1 billion in services. In exchange, the United States has agreed to reduce some of the new tariffs imposed on Chinese goods.
The United States will maintain more than 20 percent tariffs on the estimated $ 1 billion worth of goods and services imported from China. China, on the other hand, will retain most of the new tariffs it imposes on the $ 1 billion product imported from the United States.
Chinese Deputy Prime Minister Liu He said that despite differences in political and economic structure, the two countries will work more closely with each other so that both can benefit. This agreement has essentially created a place of equality and mutual respect between the two countries.
The US deficit in commodities trade with China was $ 12 billion in 20 years. And the US trade surplus in the service sector was a little over $ 4 billion. The United States is seeking to reduce this gap through a new agreement.