US and China Reach Handshake Agreement on Trade Amid Concerns of Limited Progress

After two days of tense negotiations in London, the United States and China have reached a handshake agreement to remove some of the harmful measures they had used to target each other's economies. While officials from both countries welcome the development, many analysts and experts remain skeptical about the deal's implications and whether it will hold. The agreement seems to return the countries to a status quo from several months ago, before President Trump provoked tensions with China in early April by ramping up tariffs on goods it produces. Tariffs will stay where they are, and the countries did not announce progress on other trade issues.

Key Takeaways:

• The handshake agreement will merely undo some of the damage from the trade war started by President Trump in recent months.
• The deal will not address other trade issues, with American officials saying those matters would be left for future discussions.
• China is expected to loosen restrictions on exports of minerals that had threatened to cripple an array of American manufacturers.
• The United States will relax new limits that it placed on its own exports of technology and products, as well as walk back threats to cancel visas for Chinese students in the United States.
• The agreement has raised questions about what exactly had been gained by Mr. Trump's aggressive trade tactics against China over the past few months, or whether his actions had ultimately backfired.
• Analysts and experts argue that the events of recent weeks have shown that the Trump administration has overplayed its hand against China, particularly in the area of rare earth minerals.
• Some analysts emphasize that US restrictions on exports to China will also inflict pain on the US economy.
• The handshake agreement has sparked concerns about the precedent set by the Trump administration in using US export controls as a matter of economic leverage, rather than national security.

Statistics:

• U.S. tariffs on Chinese imports are expected to set the stage for the weakest decade of global growth since the 1960s, as per a report by the World Bank.
• The United States limited access to a range of software, products, chemicals, and technologies, including critical elements that China uses to develop advanced chips and jet engines.
• US restrictions on ethane exports destined for China had particularly backfired, forcing major American energy companies to halt billions of dollars in planned exports.
• China has demonstrated its ability to use export controls to inflict pain on the United States in a way it had never broached before, according to Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies.

Sources:

• "The New York Times" (Exact quotation as provided)