S&P: US-China 'phase one' trade deal creates more questions than answers

S&P Global Market Intelligence carried an editorial piece earlier this week, analyzing the US-China ‘phase one’ trade deal agreed last week.

Key Quotes:

“While stock markets responded positively to the Dec. 13 announcements of a "phase one" trade deal between the U.S. and China, there are a number of reasons to question what it means and even whether the agreement will get over the finish line.

Differences in the statements out of China and the U.S., skepticism about the value of proposed purchases of U.S. goods by China, and uncertainty around any rollback of tariffs are all giving analysts pause before they welcome the announcement with open arms.

The U.S. said the deal will increase Chinese purchases of U.S. goods and services by $200 billion in 2020-2021 from $179.3 billion in 2018, but there is no mention of the figure in the Chinese statement, which says the deal can "help [expand] economic and trade cooperation between the two nations" while also stressing a U.S. commitment to phase out tariff increases on Chinese products in stages.”