Trump signs U.S. China trade deal
After months of negotiations between the U.S. and China, President Donald Trump signed a trade deal Wednesday that begins to open trade between the two countries.
In the deal, China will promise to purchase $200 billion in goods from the U.S. for two years.
The deal also requires China to reduce unfair trade practices and protect intellectual property for U.S. companies operating in China.
Brian Laraway of Bury Financial in Youngstown said, "The devil is in the details when it comes to trade deals like this."
One significant component of the deal is China's agreement to purchase more agricultural goods from the U.S.
"We won't know the immediate effects of the deal until some time has passed, but I believe that agriculture will see the earliest and quickest effects from this deal."
The deal will increase exports of U.S. food, agriculture, and seafood products, increasing American farm and fishery income, generating more rural economic activity, and promoting job growth.
A multitude of non-tariff barriers to U.S. agriculture is addressed in the deal to products like soybeans, meat, poultry, seafood, rice, dairy, and infant formula.
"I know farmers in the area and nationwide have been waiting to sell to China
Laraway said areas like technology and financial services would benefit later on from the trade deal.
China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government.
Removal of barriers should allow U.S. financial service providers to compete on a more level playing field and expand their services export offerings in the Chinese market.
The trade deal will also have China removed from the list of currency manipulators.
This approach will help reinforce macroeconomic and exchange rate stability and help ensure that China cannot use currency practices to compete against U.S. exporters unfairly.
The deal is just the start of further expanding trade with China.
"It's going to take a while to build brides back with China," said Laraway
China’s increased imports of U.S. goods and services are expected to continue for several years after 2021 and should contribute to rebuilding a U.S. - China trade relationship.