With an impeachment trial looming, US President Donald Trump has been handed two back-to-back trade wins. The US and China agreed to a truce in their trade war by signing a trade deal after two years of tensions which threatened to tear the global order apart.
Under the long-awaited initial agreement, US will lower tariffs on several Chinese goods. China pledged to increase purchases of US agricultural products and other imports for the next two years. Both countries will resolve differences over how this deal is implemented to avoid tariffs and other penalties.
Trump has hailed the deal as a “momentous step” which has never taken place with China before allowing “fair and reciprocal trade”. He said they are “righting the wrongs of the past.” The US president has on several occasions claimed that China is taking advantage of the US and “ripping them apart”. Trump is a businessman who has called himself a great deal maker.
Another victory came as the US Senate approved the US-Mexico-Canada (USMCA) deal, the successor to the NAFTA trade pact, negotiated after much criticism from Trump. Apart from tougher labour rules, the deal leaves much of the trade flows largely unchanged and is simply a moral victory instigated at Trump’s behest.
The good news on the trade front offers a boost to the embattled president who faces re-election within ten months. Trump also faces an impeachment trial and has hired celebrity lawyer Alan Dershowitz to defend him. Another high-profile member of his team is Ken Starr, who worked to remove Bill Clinton from office over twenty years ago. Trump is expected to be acquitted as none of the Republicans have called for his removal.
The news from China is not favorable as economic growth slowed to its weakest rate in nearly thirty years. The 6.1 percent expansion was slower than the 6.6 percent growth rate in 2018 as China endured a bruising US trade war, sputtering investments, and an ailing manufacturing sector. This does not project a gloomy picture of the Chinese economy as the trade deal has increased business confidence and the current year promises to bring resilient growth.
As Trump has entered this final year of US presidency, he is more likely to claim these achievements as his own in bid for a second term. Unless there is some serious Democrat contender, he seems to be on course for a new presidential term and for not disrupting globalization- at least for now.