But even though the White House said a deal was reached more than two weeks ago, neither side has released the exact wording of their agreement. Still, the announced deal has been enough to lift financial markets because many investors feel encouraged about the direction of the talks.
U.S. and Chinese negotiators said earlier this month they had reached a “phase one” agreement, and Trump agreed not to impose new tariffs on an additional $160 billion in Chinese imports.
The president also said on Twitter on Tuesday that he would be going to Beijing for “phase two” of negotiations at a later date. The initial deal left unresolved many of the most contentious issues the White House has raised with China, such as China’s heavy domestic industrial subsidies and technology-related provisions.
The partial easing in trade tensions comes as Trump gears up for his 2020 presidential campaign, and his message so far has been heavily focused on the U.S. economy. For nearly two years, Trump’s tariffs on China and other nations have created uncertainty and led business executives to pull back investments.
But the political ramifications of reaching the initial agreement remain unclear. Some Democrats, who support taking a tougher approach with China, have criticized the White House’s initial deal, saying Trump backed down too quickly.
Critics have also said phase one of the China trade deal does not come close to meeting the president’s grandiose promises to remake U.S. trade.
“This is something that could certainly lower uncertainty and potentially take the trade war off the table as a factor that can slow the economy and hurt the stock market,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “But most people agree it’s going to be a long, hard slog to get a ‘phase two’ agreement.”
But White House officials have defended the agreement, saying it would more than double Chinese purchases from U.S. producers over the next two years. Trump administration officials have said China will buy $200 billion in American agricultural, energy and manufacturing goods, although Chinese officials have not confirmed these numbers.
A move from China to purchase more U.S. farm and energy products may not be enough to offset the heavy losses that many farmers experienced during the trade war, particularly in politically crucial swing states in the Midwest. U.S. soybean producers and other farmers have seen a sharp curtailment of their ability to sell to Chinese consumers.
The phase one pact avoided tariffs that the United States had threatened to impose on cellphones, laptops and other tech products made in China and shipped to the United States. But tariffs remain on many other products, something the White House did to try to keep pressure on Beijing for future talks. A 25 percent levy on $250 billion in Chinese goods remains in effect.
Critics have pointed to the major issues left unresolved by the initial deal. The phase one pact leaves unresolved China’s large subsidies for industrial businesses, the state-owned enterprises that compete with American firms, and currency practices that critics say make it easier for China’s domestic manufacturers.
“It’s incredibly disappointing the last three years has built up to this agreement, and there’s no clear path forward after this,” said Scott Paul, president of the Alliance for American Manufacturing. “There’s been a lot of disruption and pain, and there hasn’t been a lot of progress on the most important issues.”