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GOAT POTUS

The US and China sign historic trade deal

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Well what do we have here?!?

https://www.google.com/amp/s/www.fxstreet.com/amp/analysis/the-us-and-china-sign-historic-trade-deal-202001151827

Market reaction to the US-China trade deal signed in Washington today has been priced for several weeks. The next phase will be determined by the economic performance of the two countries as they implement the terms of the accord.  

The preliminary currency moves are complete.  The Treasury Department has removed China’s designation as a currency manipulator and the People’s Bank of China has revalued the yuan 4% higher against the dollar since its more than ten-year low on September 3rd.   Both moves are the first steps to the much more complex new relationship spelled out in the accord.

USD/CNY

usdcny%20jan%2015-637147096386352675.PNG

This  phase one agreement attempts to reorder the trade and financial relations between the world’s largest economies. It was sought by the United States who demanded recognition that China had grown, in size and expertise far beyond the era when she needed assistance to join the modern world.

Terms of the deal are spelled out in the 94 page text but the outlines of the pact have been known for several weeks. They include a suspension of planned US tariffs on $156 billion of previously untaxed Chinese consumer goods that had been scheduled for October 15th, an increase in China’s purchases of American farm products by about $32 billion, new energy exports from the US worth some $50 billion, manufactured items by $80 billion and services by $35 billion. The US will also cut in half the existing duties of 15% on roughly $120 billion of Chinese exports that had been levied on September 1st.

Tariffs will remain on approximately $360 billion of yearly Chinese exports to the US.  President Trump said in the press conference prior to signing that these tariffs will all be removed when a phase two deal is completed.

These commitments will play out over the next two years as will the Chinese promises to remove the requirements for technology transfer, improve protections for intellectual property and eliminate ownership restrictions that have been in place since China opened to the world a generation ago.

The trade war between the China and the US roiled global market for almost two years and threatened to drag the world economy into recession.  Its impact was felt in both countries as Chinese GDP fell to its lowest expansion in the modern era and US growth fell by a third, manufacturing slipped into recession and job creation in the factory sector dropped by almost 80%.

China GDP

china%20gdp%20jan%2015-63714710146259999

FXStreet

In many ways the success of this deal rests in the business communities of both countries.  Markets will judge the impact as the Chinese and US economies respond to the terms of the agreement in the first and second quarters.  

Initially it will be easier to evaluate the performance of China as the agricultural and energy purchases promised in the accord are under the control of the government.  The deal should also lift the pall that has lain over the global economy and liberate investment spending that has been inhibited by the spectre, however unlikely, of a full-fledged trade war.

American industry has been as reluctant as the rest of the world to invest in new equipment and capacity over the past year.  The combined jump in business investment in durable goods of 1.2% in November and December may be an indication that the trade deal has indeed liberated industry pocketbooks.

The trade deal is an historic achievement for both countries and for President’s Donald Trump and Xi Jinping but its success is no longer in their hands.

 

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Just now, facelessman07 said:

Time to tag every leftist on the board.

There’s a reason they barely show here anymore.

Thats because they hate this. They havent cared about the lost jobs, the theft of intellectual property, the currency manipulation, or the Americans killed or hurt by Chinese products

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2 hours ago, GOAT POTUS said:

I haven't seen very much of the mainstream media reporting on this. 

Can anybody find something that lays this out in layman terms? It is possible that its all for show

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7 hours ago, Dago said:

Can anybody find something that lays this out in layman terms? It is possible that its all for show

I haven't seen one that goes into great detail just yet, but I have no doubt that something will come out within the next few weeks. 

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3 hours ago, GOAT POTUS said:

I haven't seen one that goes into great detail just yet, but I have no doubt that something will come out within the next few weeks. 

it isn't like this would be the first time a politician shoved some bullshit through and claimed victory so I want to see the details

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7 hours ago, Dago said:

it isn't like this would be the first time a politician shoved some bullshit through and claimed victory so I want to see the details

It’s a “phase 1” trade deal, so that’s a tacit admission that we’re not getting everything we want and that there’s still a long ways to go. I agree with you, until I see otherwise, this doesn’t feel as significant as the Trump admin would like for us to think.
 

Here’s some of what the deal is supposed to accomplish, summarized by John Carney in a Breitbart article.

Quote

 

If China lives up to its commitments under the deal, including protecting American intellectual property and ending forced technology transfers, it will demonstrate that President Donald Trump’s policies have forced China to abandon at least some of its predatory mercantilist strategies.

If China fails, the U.S. can unilaterally impose tariffs and China is prohibited from retaliating with its own tariffs, Carney explained. If China continues to resist reforms that would make it a safe trading partner, the U.S. will have to move away from trade with China.

Another important achievement is that the U.S. got to keep nearly all of its existing tariffs in place, Carney explained.

The deal also should open China’s markets to U.S. beef, dairy, and poultry, long a source of frustration for U.S. farmers excluded by non-tariff barriers.

The deal also requires China to change the way claims of intellectual property theft are handled in China, a significant legal reform that should discourage Chinese companies from stealing I.P. and trade secrets.

China’s willingness and ability to abide by its commitments is still the big unknown, Carney said. But the trade deal sets up a “trust but verify” regime. If China fails the test, the U.S. would be justified in decoupling its economy from China’s, Carney said.

“China has agreed to stop a bunch of abusive practices and agreed that we can respond to tariffs, and they will not retaliate. That’s something that has never been done before,” Carney said. “If China will not live up to this agreement, then there will be no phase two.”

 


While I certainly won’t put it past Trump to boast this as some huge accomplishment before we see any results, I do think Trump will start hitting China hard with more tariffs if they keep fucking around. The POTUS certainly hasn’t been afraid to make strong foreign policy decisions so far. Only time will tell really.

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On the surface it goes beyond what any other US president has done

Our last president used to set up like a performing seal to blow the Chinese 

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