Commenting on this evening’s signing of the ‘phase one’ trade deal, TFG spoke to Dr Rebecca Harding, trade economist and CEO of Coriolis Technologies
“This trade deal is entirely political and leaves around $380bn of tariffs in place. In an election year, President Trump can present this as a win for US manufacturers and producers. He also retains leverage on China in any future trade deals that might be negotiated. Issues around China’s Intellectual Property “theft” and its security risk to the US economy have been kicked into a subsequent agreement which is unlikely to be signed before the US Presidential election.
“Throughout the process, the US has increasingly moderated its tone. We have gone from “trade wars are quick and easy to win” at the end of 2017, to “this is going to take time” in 2019 to “the deal will take place in stages”. What this approach does is create a PR event for Trump – he has signed a deal with China – but kicks the detail into the long grass after the election in terms of a deal while taking a strategic and covert approach behind the scenes through deals with allies and sanctions on tech.
“Interestingly, the US Commerce department has also threatened to impose more sanctions on Huawei today. This is troubling because again, it shows that the detail of the deal on security is now being dealt with by the US by other means than through the trade agreement itself. It is unclear how this will pan out in terms of the impact on US or indeed EU companies, but it does lend weight to the potential for a separation between East and West in terms of technology.”