Joerg Wuttke, head of the European Union Chamber of Commerce in China:
“The good news is the downward spiral has been stopped for business, that means more predictability but unfortunately for the likes of EU business and others such as Brazil it means that for the next two years $200 billion will be traded between two nations without competition.”
Timothy Stratford, managing partner in Covington & Burling LLP and a former Assistant U.S. Trade Representative
“It is a fairly fragile truce. There are going to be a lot of challenges implementing the agreement.”
Tom Orlik, Bloomberg Economics
“China—the main loser from the trade war—is the main beneficiary of the truce. Our China team have raised its forecast for the country’s 2020 GDP growth to 5.9% from 5.7%. The composition of growth will also be a little more balanced, with less need for state investment to offset weak exports and private-sector capex.”
Former U.S. Treasury officials had a mixed response on what the deal will mean for the yuan’s stability.
Here’s Brad Setser, who worked at Treasury during the Obama administration and is now at the Council on Foreign Relations
Wow. There is really almost nothing new in the currency provisions. China has agreed to disclose material that it is already disclosing (basic information on its reserves and balance of payments).
— Brad Setser (@Brad_Setser) January 15, 2020
And here’s Mark Sobel, a former Treasury and International Monetary Fund official
Not so fast. Yes, general, exchange rate practices and transparency sections are not new. But enforcement part could let US unilaterally subject an XR complaint to dispute resolution and tariffs. Then, dispute mechanism would put XR issues under USTR, which has no macro remit.
— Mark Sobel (@sobel_mark) January 15, 2020
Wendy Cutler, a veteran trade negotiator now at the Asia Society Policy Institute
“It is a solid deal and the administration should get credit for achieving this deal, that said, it falls way below the expectations they set out at the beginning of this negotiation when they were going to address all the issues that are keeping U.S. companies out of the Chinese market. This negotiation proved a lot tougher than they thought.”
Andy Rothman, a former U.S. diplomat in Beijing who’s now an investment strategist at Matthews Asia.
“I have two serious concerns about the deal. First, the targets for increases in China’s imports from the U.S. appear to be unrealistically high, which could set up the deal to fail, leading to additional tariffs or even a full-blown trade war. Second, Lighthizer acknowledged today that “This deal will work if China wants it to work.” Over the long term, will the Chinese government want it to work if the Trump administration continues to pursue confrontational policies on almost every issue aside from this deal?”
Hubert Tse, partner at Boss & Young law firm in Shanghai, who advises global banks, insurers and financial institutions in China.
“The U.S. financial firms are clear winners, it’s a major step-forward for them in China. It’s unimaginable 10 years ago for Wall Street banks and financial institutions to have majority control in China ventures, let alone outright ownership.”
Michael Hirson, New York-based practice head for China and northeast Asia at Eurasia Group
“If serious frictions do arise – we see this as all but inevitable – will Trump once again raise tariffs on Chinese goods? The president will be somewhat cautious about taking actions that derail phase one, especially ahead of elections. However, his restraint has limits: criticism that he is failing to live up to the enforcement provisions of his deal could sting.”
Arthur Kroeber, a founding partner and managing director at research firm Gavekal Dragonomics
“Leaving aside the continuing risk to the tech sector, the implausibly high targets for increased U.S. exports to China leave open another source of risk. Under the terms of the deal, if China fails to live up to its commitments, the U.S. is free to reimpose tariffs. If, as is likely, it proves impossible to double U.S. exports to China within the next two years, a renewed trade war could well be a feature of a Trump second term. For the moment, though, it is probably best to enjoy the calm of the storm’s eye for as long as it lasts.”
This article was provided by Bloomberg News.