Half a cheer for Trump’s China trade deal

Half a cheer for Trump's China trade deal
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Half a cheer for Trump’s China trade deal By signing a phase-one trade agreement with China, President most likely has succeeded in preventing a crisis of his own making from spiraling out of control. At least now, in the run up to the November election, it seems highly unlikely that we will have an escalation in the U.S.-China trade war that has caused so much damage to the U.S. and world economies. But it is far from clear whether this phase-one deal will have done anything to repair the damage from the punitive import tariffs imposed on China. This would appear to be especially the case since the administration is not planning to roll back the many restrictive import tariffs that will remain on China until after November’s U.S. presidential election. Even then, the administration is likely to do so only after determining that the Chinese government has fully complied with its obligations under the phase-one arrangement. Given China’s poor track record in addressing U.S. complaints about intellectual property theft and forced technology transfer, one should not hold one’s breath for a further de-escalation in the U.S.-China trade war next year. It is difficult to overstate the toll that the U.S.-China trade war has exacted on the U.S. and global economies. U.S. investment has virtually stagnated at home as a result of heightened economic policy uncertainty and of fear about global supply chains getting disrupted. Meanwhile, in recent quarters the U.S. manufacturing sector has been in a troubling slump […]

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