The trade deal reached by the US and China on 13 December was in line with our expectations: more a ceasefire than a peace treaty, but nevertheless a hopeful development. In our view, the significance of the deal lies not in its limited
direct growth impact on either economy, but rather in letting both countries – and the rest of the world – catch their breath and release some pent-up demand.
Even this limited deal will not be easy to implement, we expect, with tensions likely to persist and rows to erupt on occasion. Two particular issues to watch will be the enforcement mechanism and the ambitious aim of about doubling US
agricultural imports to China in 2020. We do not expect the second phase of negotiations to start in earnest until after the US presidential election.
