Here is why China may rip up & quit the phase 1 trade deal (they may have to)

Author: Eamonn Sheridan | Category: News

The US wanted a strong enforcement mechanism to bind China to the commitments made in the Phase 1 deal signed Wednesday:

  • The US will impose further tariffs in proportion to damage caused by any non-compliance
  • And, if China disagrees, it has no appeal or right to levy tariffs in retaliation, its only recourse is to rip up the agreement and leave it.
This deal appears fragile. 
But, countering the 'just leave' option:
  • grievances will be aired through a series of consultations
  • over a roughly 90-day period before penalties can be levied
  • there will also be regular trade consultations, monthly working-level meetings, quarterly deputy meetings and semi-annual ministerial level conferences

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