The US and China have agreed to terms laid out for a “phase one” deal to end the trade war.
The details of the phase one agreements were promptly released by both sides. The deal is set to reduce the tariffs placed on certain Chinese goods in exchange for more Chinese purchases of US agricultural products. For now, the 15% tariffs on $160 billion worth of Chinese goods that were scheduled for Sunday will not go into effect. China had retaliatory tariffs against US cars scheduled for the same day, which were also cancelled. The US also cut the tariffs imposed on September 1 in half.
The 25% tariffs placed on $250 billion in Chinese goods will remain in place, but will be discussed in phase two negotiations next year. For now, China has agreed to address its trade surplus with the US by agreeing to buy American products and services valued at at least $200 billion during the next two years. The US currently has a $419 billion trade deficit with China.
Among one of the trickier parts of the trade war is the issue of intellectual property. Phase one of the trade deal includes a stronger set of protections for intellectual property rights in China. The measures include stronger legal protections for patents and a stronger system for fighting intellectual property rights infringements. China also agreed to refrain from devaluing its national currency in order to gain a trade advantage.