Clicky

  1. Home
  2. >
  3. News
  4. >
  5. Many loopholes in the US-China trade deal
  • Home
  • >
  • News
  • >
  • Many loopholes in the US-China trade deal

Many loopholes in the US-China trade deal

January 29, 2020
833f217779fa7b86e7cf481e348845dd

Global business marketplaces have become filled with the chatter of what will happen as a result of the U.S.-China Trade Deal, which has epitomized the much-needed step-forward from the two-year hostility between the two world powers. 

Despite its magnitude and importance in world economics, however, this deal has seemingly failed to address a few crucial topics that will affect not only the United States and China but possibly trade marketplaces around the world. 

Here are some of the loopholes within the U.S.-China Trade Deal:

Made in China 2025

China’s ambitious “Made in China 2025” plan aims to shy away from being the “world’s factory” of all goods and shift to producing high-value products and services. While this may seem like a good idea as this program will give the opportunity to Chinese companies to become world-class leaders in emerging technological industries. However, this is a direct threat to the American tech sector, as Chinese companies are known to outpace the American ones due to the subsidies that their government provides for them.

All in all, this leaves U.S. tech companies vulnerable to China’s 2025 plan, as China plans on dominating this industry.

Access to Foreign Financial Services in China

While the agreement addresses the idea of allowing market access for financial firms and banks, analysts say that this doesn’t mean that the access will be equally generated for American marketplaces in China.

Despite the fact that China has opened its financial services sector, this doesn’t simplify the process of U.S. companies using these services, as the sector has since become flooded with domestic digital payment plans. This may be an efficient alternative option for U.S. firms, but many analysts say that this isn’t the best option for those U.S. companies currently outsourcing their operations in China, as the belief states that U.S. payment firms will not be able to compete with the Chinese ones in the market due to the uneven treatment.

Enforcement and Monitoring

One of the key points highlighted in the U.S.-China Trade Deal was that China must comply with all U.S. protocols in all situations. Initially, the deal has a dispute resolution mechanism in place, which required China to begin consultations with the U.S. about any concerns or complaints. However, what most don’t know is the idea that the deal didn’t mention an enforcement monitoring system in place, which would technically make sure that these promises are kept.

The Future of Tariffs

While the agreement addressed the tariff decrease of Section 301, List 4A items from 15% to 7.5%, it also leaves out the answers to crucial questions like if and when the still-existing tariffs will go down.

While it seems that only the production companies are affected by the high tariffs, it is evident that consumers are affected by this more than anyone else, as they end up paying more for the same goods that they were purchasing for a much cheaper price before the dispute between China and the U.S. began two years ago.


More News

60457ea560ffdb3e4c7737e349f77fe4

How Chinese Manufacturers are Adapting to the U.S. - China Trade War

June 15, 2019

Ongoing trade tensions between the United States and China continue to be the defining story of the 2019 global economy. What started off as an ongoing dialogue about the economic relationship between the two largest economies in the world has transformed

cb45781e03d86bba16317edcdcc79ce4

A step by step guide: How to use a Carnet

December 19, 2019

It has been established: ATA Carnets make the import/export experience of non-commercial goods so much easier, however, the usage of this document, has its own complications and concerns. Many Carnet holders often show concern about when to use each part

f650f04a74330ad17475d861429b490c

The U.S. and China Reach Phase One of Trade Agreement

December 14, 2019

This serves as a promising stepping stone in the resolution of the ongoing Trade War between the two countries. On Dec. 13, the U.S. and China reached what leaders of both countries call the “Phase One” of a long-awaited trade agreement, which serves as

China-US Ocean Freight Shipping Guide: From Click to Doorstep

China-US Ocean Freight Shipping Guide: From Click to Doorstep

November 22, 2023

Explore the journey from ‘Buy Now’ to your home in our China-US Ocean Freight Shipping Guide. Discover the trade, environmental impact, and future of shipping.

c5a5c8fe8152379f93caa421c6566ef7

How Many Customs Brokers Do You Need? Why a Single Broker is the Best Option

May 08, 2023

Do you really need multiple customs brokers? Find out how a single freight forwarding and customs brokerage provider saves you time and money.

5cb9dec2f85f4b4c2078a2eac4399bf7

Understanding the Jones Act: The America-First Cabotage Policy

June 17, 2020

Why it’s so expensive to ship goods and to travel between multiple U.S. ports.

7c8dc032d0e0929ff6135f2e1758274b

Freight Right ranked #19 best place to work by LABJ

August 05, 2021

The Los Angeles Business Journal has ranked Freight Right as the #19 Best Place to Work.

868eda7942b6beb2f966593ef0381275

Freightos FreightTech 2020 Suggests Tech Advancements

February 07, 2020

This two-day event highlighted integral information about technological advancements for freight-forwarders.

a3dd4508db043bfc57bba7e01df29ad2

How Chinese Tariffs Affect Your Freight and Logistics

November 13, 2019

We examine how US-China trade tariffs have affected freight and logistics around the world.

19fb99ddb8070b3f8977ebd582610e1d

Freight Right to offer new consolidation services from China to the US.

August 13, 2021

Freight Right is now offering direct consolidated ocean shipments to the Port of Long Beach and Los Angeles.