So far, much deliberation has arisen over the recent announcement by the US and China that they have agreed on the much needed “phase one” trade deal. US President Donald Trump described it as "great" while the Chinese site touted it as "remarkable". Days after they claimed that the deal was wrapped up, it is still unknown when, where and by whom it will be officially signed. But Trump already dropped his plan to impose more tariffs on Chinese goods initially set for December 15th of 2019 and China withdrew its intention to retaliate.
| US President Donald Trump and Chinese President Xi Jinping. Photo: CNN |
A truce has been seemingly reached between the US and China. And as long as it lasts, no escalation is insight. That is good news for them and for the world economy and trade. This phase one trade deal could pave the way and open opportunities for the US and China to start to negotiate the so call phase two deal.
But skimming through the newly agreed phase one trade deal, one can perceive that it is still very far from being a fundamental and breakthrough document. It can only be a temporal truce between military campaigns. The US keeps most of its trade tariffs already imposed on Chinese goods while China has still not revealed how and when it will honor its commitments or its concessions to the US in the framework of this phase one trade deal.
The political impacts of the deal, domestically as well as to the world, and psychological effects are of course remarkable and very important for both Donald Trump personally and the Chinese leadership. But it was too little and too limited to be capable of touching the core and nature of the present trade conflict between the US and China. Even more, it meant nothing in the context of the strategic comprehensive competition between the world’s two biggest economies.
For the moment, it satisfied both Donald Trump and China because Trump needs concrete results to claim them as a victory over China and China wins time without having had to make any painful concessions to the US. Both of them still know that only one battle but not the war is over. The next stage of their conflict is coming, sooner than later.
