The South China Morning Post on December 14, scooped the terms of the long-awaited phase one trade deal between the US and China. According to several US sources, China will agree to purchase an additional USD 200 billion of American goods per year, including: USD 75 billion of manufactured goods; USD 50 billion worth of energy; USD 40 billion of agricultural goods; and USD 35-40 billion worth of services. In return, the US side has pledged to reduce its 15% tariffs on USD 120 billion worth of Chinese goods to 7.5%. The deal will also contain an enforcement provision, enabling the US to unilaterally reimpose tariffs if China doesn’t live up to its side of the bargain.

On December 13 night, the US Treasury Department removed China from its list of currency manipulators.

(Comment: US experts assess that China blinked slightly to buy China a truce that gives Xi Jinping time to temporarily stabilise the relationship, limit economic harm, and pre-empt any firther actions against Huawei and other Chinese firms. Overall high tariffs remain in place on both sides with the US halving the September 2019 tariffs (on $120bn of goods) to 7.5%, and not carrying out the threat to raise tariffs on the remainder of goods last December. China has committed to buy an extra $200bn of goods and services relative to 2017. Thats an 85% rise on 2019 levels. These span: agri goods, mostly soybeans, from $19.5 to 39bn; energy from $8.5 to 42.4bn; mfg goods from $102 to 146.8bn; and unspecified services from $56 to 81bn. China has additionally offered a rehash of pre-existing commitments to strengthen IP protection, increase market access, limit tech transfer, and keep the fx and financial services systems open.)