US, China trade deal is a 'real breakthrough'
'Our farmers are going to have to buy more tractors and plant more fields'
America's initial trade pact with China "looks like a real breakthrough," one expert says, marking President Trump's second victory this week on a key campaign promise.
The phase one agreement, which includes promises by Beijing to purchase $50 billion of U.S. agriculture, stronger intellectual-property protections and an end to China’s currency manipulation, further cools the 21-month-long trade war between the world’s two economic superpowers. The U.S. has agreed not to put 15 percent tariffs on $160 billion of Chinese goods on Sunday.
“There’s a matter here that the Chinese may have given him so much that he doesn’t really want to embarrass them by making it all public so it may be a lower-level signing agreement, not him and president Xi and not some sort of long 20-page deal,” Michael Pillsbury, director of the Center for Chinese Strategy at the Hudson Institute, added in an interview with FOX Business’ Lou Dobbs.
US AND CHINA REACH PHASE ONE TRADE DEAL
One of the main pillars of Trump’s first campaign was to reduce the U.S.’ trade deficit with China, which has grown from $318 billion in 2016 to $378.6 billion in 2018, according to the U.S. Trade Representative.
“That's going to improve,” Pillsbury said.
The benefits will also be evident "in our own manufacturing spurting ahead," he added. "The president joked with me today, Lou, about our farmers are going to have to buy more tractors and plant more fields because of these rather large Chinese purchases coming soon.”
The Chinese hope the deal will provide a boost to their economy, which grew 6 percent in the third quarter, its slowest pace since recordkeeping began in 1993. Beijing has called for the U.S. to roll back all tariffs as part of a phase one agreement, though Trump expressed reluctance.
CLICK HERE TO READ MORE ON FOX BUSINESS
As for phase two, talks will continue, with the hope of a real signing ceremony with Trump and Xi a year from now that covers “everything else that isn't covered today,” Pillsbury said.