It’s official. President Trump and China have agreed to a “phase one” trade deal after 21 months of wrangling and pain.

Trump tweeted Friday that the agreement is “large” and “amazing.” In a rare news conference, Chinese officials emphasized that it is “based on equality” and a win-win for both sides. Both camps were quick to praise the deal, but the text of it has yet to be released. The U.S. Trade Representative’s office released a short “fact sheet” about the deal at 4:55pm on Friday.

What we know so far is this: Trump agreed to scale back some tariffs (which was China’s top demand and was cheered on Wall Street). In exchange, China said it will buy more U.S. farm products (which Beijing had wanted to do anyway), enhance its intellectual property protections and allow U.S. banks and credit card companies full access to China.

The emerging consensus is that this deal helps Trump’s 2020 election prospects. On the actual substance, he got China to give a little, but not a lot. Here are the highlights:

1. This is a modest deal. It’s called “phase one” for a reason. Trump couldn’t get the big deal he promised, so he went with the easy stuff. It’s uncertain if there ever will be a phase two. Trump says it will come after the 2020 presidential election, but much can change by then.

What’s clear is Trump has not gotten China to fundamentally alter its economy, as he promised. He launched the trade war in March 2018 by saying he wanted to reduce the trade deficit, stop the Chinese from stealing U.S. technology and secrets, and put an end to the Chinese government subsidizing major industries. The phase one agreement does mean China is likely to buy close to $200 billion more of U.S. goods over the next two years (about half of which would be in agriculture), which should reduce the trade deficit.

But the deal does little to achieve Trump’s bigger goals. Chinese leaders stress they will make changes on intellectual property at their own pace and that there is no commitment to scale back subsidies. President Xi Jinping’s “Made in China 2025” plan is still going forward at full speed.

2. China didn’t give up much. The Chinese have long wanted to buy more American meat, crops and energy to fuel their growing economy and expanding middle class. That’s why China, back in mid-2018, offered to buy more of these goods in exchange for Trump holding off on tariffs. Fast forward to the end of 2019, and that’s pretty much the deal Trump got.

Many were quick to blast Trump for not pressing China for more. “The very fact that this is a ‘phase one’ deal is a reflection of utter defeat. Nothing gained but lukewarm purchases after 18 months of a costly trade war,” tweeted James M. Zimmerman, the former chair of the American Chamber of Commerce in China.

China did agree to finally open up to U.S. banks and credit card companies, so they can operate in China without needing to partner with a local firm. But it’s likely China was ready to do this now that its domestic banks are well-established and it wants more foreign investment. The most substantive win for the White House is that if China fails to live up to its commitments, the United States is allowed to hit back with more tariffs and other penalties.

3. This should help Trump politically. Trump can say he got something done, even if it’s limited. He can spin it with his base — and probably independents — as evidence that he delivers on his campaign promises, even though it falls short of his promises to fundamentally change business in China and to bring lots of jobs back to the United States. He has managed to shift the media narrative away from impeachment, at least on Fox News and the business TV channels.

Among Trump voters, some of the most frustrated were farmers. This deal does a lot for them, with China likely to buy the most U.S. agricultural products ever in 2020. It also is likely to bring farmers who were doubting whether to vote for Trump again back to the “MAGA” fold. More broadly, this deal should ensure the economy does not fall into a recession next year. It doesn’t take away all the uncertainty around Trump’s trade policies, but it dials it down.

4. Farmers, bankers and Apple gain the most. Farmers and financial firms come out best in the deal. The most agricultural products China has ever bought from the United States in a single year was about $26 billion worth in 2012. It’s likely China will surpass that next year.

On Friday, Trump told reporters, “I think in agriculture they will hit $50 billion.” Chinese officials refused to give a specific figure. When pressed about whether the $50 billion would happen next year, Trump said the buying would occur “pretty soon.” Regardless of the timing, farmers are likely to rejoice given that China purchased just $9.1 billion last year.

In financial services, U.S. banks and credit card companies have long wanted to enter the Chinese market, but they could do it only by forming a joint venture with Chinese firms, something many were hesitant to do. This deal gives Wall Street firms what they wanted. Apple also comes out a winner. Trump scrapped the tariffs he had planned to put in place Dec. 15, which would have mainly hit toys, cellphones and laptops. While the overall stock market was flat Friday, Apple stock jumped 3 percent after Trump confirmed he was canceling the Dec. 15 tariffs.

5. Biggest win for the economy is scaling back Trump’s tariffs. For the past six months, companies have been too spooked by Trump’s unpredictable trade war to invest. This deal signals that Trump is unlikely to increase tariffs more in 2020, a relief to many business leaders. It doesn’t go as far as executives would like (most want the tariffs fully removed), but Trump is clearly hitting pause on the trade war.

Trump’s top advisers have argued that this deal, plus the new U.S.-Mexico-Canada trade agreement (USMCA), would add close to half a percentage point to growth next year, rising expectations from around 2 percent to 2.5 percent. Economists outside the White House are less optimistic. The effects “would be negligible” tweeted Gregory Daco, chief U.S. economist at Oxford Economics. Still, the consensus view is the trade deals reached this week clear away some of the darkest clouds that were hanging over the U.S. (and global) economy.

Here’s another way to look at it: Trump has tariffs on about $370 billion worth of Chinese imports. That number isn’t going down. Trump did agree to lower the tariffs on about $120 billion worth of Chinese imports from 15 to 7.5 percent. The result is the United States will collect about $9 billion less in import tax duties after this deal (down from about $80 billion), a modest reduction. The boost to the economy is likely to come from a change in business sentiment, not the actual change in tariffs.

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