Who won the trade war?

Let’s start with the round up at Sinocism:

Trump, China Sign Phase One Trade Deal – Bloomberg

The Trump administration says what separates its deal most from others is the enforcement mechanism it establishes…

But even Lighthizer acknowledges how effective that mechanism will be depends on Beijing. “This deal will work if China wants it to work,” he said Wednesday…

The text of the deal released Wednesday specifies $77.7 billion in Chinese purchases of manufactured goods including aircraft, $32 billion in agricultural products, $52.4 billion in energy and $37.9 billion in services in the two years through December 2021.

China’s Xi tells Trump he welcomes Phase 1 trade deal – Reuters

Xi told Trump in the letter, read by Liu during the signing ceremony, that the deal shows how the two countries can resolve their differences and find solutions based on dialogue.

China Speeds Up Opening of Market to Investment Banking Giants – Bloomberg

“China shall eliminate foreign equity limits and allow wholly U.S.-owned services suppliers to participate in the securities, fund management, and futures sectors,” according the text of a landmark trade agreement released Wednesday.

China Trade Deal Details Protections for American Firms – The New York Times

The agreement was “more positive” than expected, Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce, said at a news conference in Beijing on Monday. He added that striking an agreement had calmed tensions in a long-running trade war.

China Tariffs to Stay Until 2020 Election Despite US Trade Deal – Bloomberg

The two sides have an understanding that no sooner than 10 months after the signing of the agreement at the White House Wednesday, the U.S. will review progress and potentially consider additional cuts on tariffs affecting $360 billion of imports from China, the people said, declining to be identified because the matter is private.

The period of review, which isn’t expected to be specified in the deal’s text, is intended to give the Trump administration time to verify the Asian nation’s adherence to the terms of the pact. It won’t affect a halving of the 15% tariff on about $120 billion in Chinese goods announced in December that is still due to go ahead.

Trade War Latest: China Tries to Counter Narrative That ‘We Lost’ – Bloomberg

Chinese government media aren’t ceding a loss as the delegation from Beijing prepares to sign the document just before lunch at the White House today. One state media outlet defended China’s purchase commitments in the deal as necessary rather than a capitulation. Another compared the moment to “just the first round of a game,” cautioning against applauding the end of tensions.

Demand justifies potential rise in energy imports from US – Global Times

While the phase one trade deal between the US and China is expected to include a commitment by the latter to buy about $50 billion in energy goods, according to media reports so far, some are skeptical of China’s ability to absorb such amount of US energy products, given that US energy exports to China were about $8 billion in 2017 and 2018. Such concern may be justified but it underestimates the big picture of China’s demand for oil and gas.

A fresh surge in the country’s energy imports is possible, which could reflect two factors. One is that China needs to accelerate the build-up of a strategic petroleum reserve (SPR), which is of great importance to ensure its energy security…

The second factor is that China’s energy consumption is still growing steadily. In 2019, its apparent consumption of oil rose 5.2 percent year-on-year to 660 million tons, while consumption of natural gas jumped by 9.6 percent.

Kyle Bass and Steve Bannon are positive:

My question is what is “measurable and enforceable” when the text of the deal is secret and so vague?

One thing that is certain is Bannon’s point about the shift in the centre of gravity on views about China. In the end, that may turn out to be all that matters given it virtually guarantees an imposed Chinese deglobalisation as executives everywhere are forced to confront the personal costs of dealing with the CCP.

Looking for clean outcomes in geopolitcs and international relations is a fool’s errand so even asking who wins is a bit silly. I lean towards the Bannon/Bass view that the blow to the CCP is real and long term. To the extent that the trade war also emboldened the Hong Kong protests that is further entrenched. Both will push China more towards the middle income trap sooner than otherwise. That is great shame for the Chinese people but so be it if the CCP is in control and remains hostile to liberalism.

So, round one to El Trumpo.

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