What does the Phase 1 Trade deal between the U.S & China entail?

The details revealed point to a cautiously optimistic approach by the United States and a bumpy road ahead

Although it feels like a ‘Trump Presidency phenomenon’, the trade war between the two biggest economies of the World was in the making for quite a while. Over the years, the West, especially the United States had been blaming China for manipulating its currency, erecting barriers to business entry in the country, forcing technology transfers & not cracking down on intellectual property theft to name a prominent few.

The issue blew wide open once the current U.S administration came to power in 2017. The resulting economic hostilities kicked off in Mar. 2018 when the U.S imposed tariffs on imported goods like Steel, Aluminum & Solar panels, etc. This kick-started a tit for tat response from the Chinese authorities. We are not going to get into the details of all the tariffs but a timeline of all these events is provided in the chart above.

For the next two years, the financial markets & the global economy suffered from the uncertainty created by this trade war. Many started to believe that we might reverse all the gains made towards a global free-market economy. The U.S market, perhaps, weathered the jitters…