Why the phase one US-China trade deal should not be scoffed at – it’s about more than pork and soybeans
- The deal will allow China to focus on its domestic economic agenda amid a slowdown, including opening doors to foreign firms to serve its growing middle class
- Since the deal was announced, Federal Reserve policymakers have also issued more optimistic statements about US economic prospects
It will allow Beijing to refocus on its own domestic economic agenda while in Washington it addresses an issue that has been a source of considerable concern to the Federal Reserve.
It’s no coincidence that, with an initial settlement in the offing, some Fed policymakers have become more positive on US economic prospects this year.
“The US economy begins the year 2020 in a good place,” Fed vice-chairman Richard Clarida said on Thursday, adding: “In 2019, sluggish growth abroad and global developments weighed on investment, exports and manufacturing in the United States, although there are some indications that headwinds to global growth may be beginning to abate.”
And Dallas Federal Reserve president Robert Kaplan told Reuters last week: “If anything, my growth outlook has firmed a bit in the last several weeks.”
