US-China trade war deal reaches first anniversary as bilateral mistrust hits ‘all-time high’

One year after signing, China lags far behind in its purchases of American goods and the trade imbalance with the US has grown

But the agreement remains one of the only areas of cooperation between the nations as relations hit their lowest ebb in decades

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The world’s two largest economies signed the deal on January 15 last year, effectively calling a ceasefire in a trade war launched by the US in July 2018. Photo: EPA-EFE

Published: 6:00am, 15 Jan 2021Updated: 9:41am, 15 Jan 2021

One year after signing the phase one trade deal with the US, China remains far behind in its commitment to buy more American goods, though the agreement has been a vital sticking plaster in a fast deteriorating bilateral relationship, experts said.

The world’s two largest economies signed the deal on January 15 last year, effectively calling a ceasefire in a trade war that saw tariffs slapped on billions of dollars worth of products and reorganised global supply chains after it was launched by the US in July 2018.

Under the deal, Washington agreed to cut some tariffs in exchange for China committing to buy at least US$200 billion more worth of US goods and services over two years compared to 2017 levels.

The agreement also included provisions halting China’s intellectual property theft and forced technology transfers, as well as boosting access for US financial service firms to China’s domestic market.

An optimistic reading would be that the deal lays the groundwork for future engagement on economic and commercial issues

Nick Marro

But a year on, views are split on its success, with China failing to live up to its buying targets and the US trade deficit with the world’s second largest economy only growing.