October 24, 2019
Understanding President Trump’s Phase One Deal with China
The Trump Administration recently announced that it tentatively reached a preliminary trade agreement with China. AAF’s Director of Immigration and Trade Policy Jacqueline Varas analyzes the likely contents of this deal and concludes that, while the provisions will benefit U.S. consumers and businesses, they only move the United States back toward where it was before the trade war began.
By reversing the president’s next planned tariff increase, the “phase one” trade deal with China will benefit American consumers. But the main benefits of this agreement, larger agriculture and aircraft purchases, are not large enough to justify the years of global tensions that President Trump’s trade policy has caused. Further, any successful deal with China must also meaningfully tackle issues, such as Chinese IP theft, that have plagued the global trading system for decades. These issues will hopefully be addressed in future talks, but they are unlikely to be resolved with bilateral negotiations alone.