The US and China sign the much-touted Phase 1 deal on Wednesday, which is designed to ease tensions and build confidence.
Under the deal, China has agreed to purchase an additional $80 billion of manufactured products from the US over the next two years. China has also agreed to buy more energy supplies worth $50 billion and services of around $35 billion over the next two years.
During the same period, China also is expected to increase its purchases of US agricultural products by $32 billion. This brings total China has pledged to spend on US goods and services over the next two years to $200 billion.
There will be some tariffs relief, but the bulk of them will remain in place. However, the key problem with this Phase 1 deal is that it does not address significant non-tariff obstacles that have made it almost impossible for US producers and manufacturers to operate in China, such as procurement rules, product standards and subsidies to Chinese state-owned firms.