US and China reportedly sign tentative trade agreement

A bunch of existing and threatened tariffs between the US and China have apparently been scrapped thanks to what will hopefully be the first of many new trade agreements between the countries.

The news comes courtesy of the WSJ. It’s being reported as fact but still relies on the usual whispers from shadowy, anonymous sources. It reports that the two countries have agreed to a limited trade agreement that will reduce some existing tariffs on Chinese goods and avoid new ones due to take effect this Sunday.

Apparently the deal involves Chinese commitments to buy a bunch of US agricultural goods in return for a reduction in a bunch of tariffs. This would appear to mark a victory for Trump’s hard-line, transactional approach to negotiations with China. In keeping with that the tariffs would return if China reneges on its end of the deal.

This is being positioned as the first phase of a staggered deal with China, which also prioritises other US grievances such as intellectual property protection and currency manipulation. The next phase is expected to tackle even more tricky stuff regarding the involvement of the Chinese government in the functioning of its companies, which would presumably include Huawei.

Even the agriculture victory seems like a Pyrrhic one, however, as a massive reduction in Chinese purchases of US agricultural good has been one of the main forms of retaliation from the Chinese, so it’s possible that this deal will merely restore things to how they were a year or two ago. But then again maybe all this mucking about was necessary to create the opportunity to move to phase two.