With Phase One Uncertain, What Happens to Phase Two of the US-China Trade Agreement?
Government officials and experts from both sides are turning increasingly pessimistic about a “phase two” trade agreement between the US and China even as both nations struggle to make progress on the first phase of the agreement itself. The phase one trade deal was announced by US President Donald Trump after in-person meetings between high level trade officials at Washington in early October.
Back then, Trump had assured markets that this interim agreement would be ready for signing within five weeks and then work would start on the phase two of the trade deal. The second phase of the trade deal is expected to focus on contentious issues of IP protection and forced technology transfers, an even more troublesome topic than increasing farm purchases and rolling back tariffs that the first phase of negotiations have not yet been able to tackle so far.
As the first phase of resolution keeps getting delayed, the date for the Presidential elections is fast approaching, further complicating things for the Trump administration. Trump likely wanted to get the trade deal in place in time for his reelection campaign.
Last week, it was widely reported that the phase one trade deal signing could be delayed into 2020. Meanwhile, officials from the Chinese government have also hinted at delaying negotiations beyond the first phase until after the 2020 US elections as they would like to wait and see if Trump does get reelected before going into all this trouble.
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