As part of the U.S.-China ‘Phase 1’ trade deal to be signed today by President Trump and China’s Vice Premier Liu He, China has promised to provide more protection for the intellectual property of American companies and will also stop requiring U.S. companies to share their technology in exchange for doing business in China.
A year and a half after launching his trade war against China, President Trump will sign a partial truce on Wednesday. He’s agreed to relax some of the tariffs he imposed on Chinese imports. In exchange, Beijing has agreed to buy more American products and make other changes.
“This is a big win for the president,” Treasury Secretary Steven Mnuchin told Fox News, while conceding the “Phase 1” agreement does not achieve all the reforms the administration initially sought. “It’s not everything,” he acknowledged. “There will be a ‘Phase 2.’ But this is the first time we’ve had a comprehensive agreement with China.”
The administration agreed not to impose tariffs last month on some $160 billion in Chinese imports — including popular consumer items such as cellphones and laptops — as part of the Phase 1 agreement. It also reduced the tariff rate on another $112 billion worth of goods from 15% to 7.5%.
MacDailyNews Take: The Phase 1 U.S.-China trade deal will be a welcome relief for Apple and the market overall. Hopefully, “Phase 2” will deliver even more balance and be agreed to as soon as possible.
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018
The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!
— Donald J. Trump (@realDonaldTrump) June 24, 2018
At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006