In what can turn out to be a major positive for Donald Trump ahead of the general elections, China and United States have agreed to sign a trade deal that that will put a partial end to the one-and-a-half-year-old trade war. Donald Trump will sign only the ‘Phase One’ of the trade deal on Wednesday lifting only some of the tariffs imposed by the US government on Chinese Imports. In return, China has agreed to increase buying American goods and make other changes as requested by Trump.
The trade deal implies that China will now not force American companies to share their technology when they opt to do business in China. It also has China promising to provide more security to the intellectual properties of American companies. Whether China will actually fulfil its commitments or not still remains a doubt as the Asian giants do have a history of backing off from such commitments. As per the trade deal, US have now lifted tariffs entirely from some Chinese imports worth USD 160 billion including laptops and cellphones. Tariffs were reduced from 15 per cent to 7.5 per cent on another set of Chinese imports worth USD 112 billion. 25 per cent will continue to imply on the remaining Chinese imports in America worth USD 360 billion.
The trade deal had a direct impact on European stock markets as they closed higher right before the trade deal was expected to be signed. The U.S. Treasury Department helped the cause as well by dropping China from its list of currency manipulators. Stoxx600 eventually ended up 0.24 per cent higher after continuously fluctuating the entire day. Sterling too showed signs of positivity as it breached the USD 1.30 mark.