After 110 days in office, Donald Trump’s promise to overhaul the trade relationship between China and the US has for the first time achieved tangible results, with the two countries signing a 10-point trade deal on May 11.
“We’re announcing, jointly with the Chinese, the initial results of the 100-day action plan of the US-China Comprehensive Economic Dialogue”, Secretary of Commerce Wilbur Ross said to reporters.
Under the agreement, China will allow access for US ratings agencies, credit card companies, beef and shipments of liquefied natural gas. On the other side of the deal, Chinese cooked chicken and Chinese banks will be allowed to enter the US market. The US has also committed to sending a delegation to the upcoming One Belt, One Road summit – a move that implies a symbolic endorsement of China’s signature trade and development strategy.
Under the agreement, China will allow access for US ratings agencies, credit card companies, beef and shipments of liquefied natural gas
According to Ross, the deal will have the effect of reducing the US trade deficit with China, which has been a key focus of Donald Trump’s agenda. He also emphasised the agreement will open up “at least a $2.5bn market” for beef. However, the yearly trade imbalance between the two countries currently stands at $347bn, making Ross’ claim that the deal was a “herculean accomplishment” greater than any other “in the whole history of US-China relations” something of an exaggeration.
Yet, the agreement certainly signifies Trump is adopting a less confrontational approach to the Chinese trade relationship than that implied by his campaign rhetoric. Trump had previously pledged to officially label China a currency manipulator – something he has since reneged on – which would have introduced substantial tension into the nations’ bilateral relationship. He also repeatedly plugged the idea of imposing a 40 percent tariff on all Chinese imports, which would likely have prompted a hostile response.
As the first concrete step towards redefining the China-US trade relationship in the Trump era, the deal certainly goes some way towards easing fears of an escalation in trade disputes. Indeed, Ross quipped “US-China relationships are now hitting a new high, especially in trade”.