The Trump regime and Chinese officials signed "phase one" of Trump's "greatest and biggest deal" ever yesterday, but the market isn't exactly settings its hair on fire because almost nothing has changed.
China has ostensibly committed to buying hundreds of billions of goods as part of the deal, but all of Trump's tariffs will remain in place and so will China's corresponding retaliatory tariffs.
Buying the amount of goods China is supposedly going to buy will require issuing significant waivers to import American goods without paying duties on them, but Reuters reports that China has not issued any new waivers yet, has no currently-announced plans to do so, and the Trump regime is waiting to see them to that.
(Reuters) - China and the United States have agreed to terms of a Phase 1 trade deal on Jan 15 but Beijing has not reduced or waived tariffs on any commodities or energy further.
A senior Trump administration official confirmed on Wednesday that China will need to issue waivers or adjustments to tariffs to meet its buying commitments.
But so far Beijing has not committed to any new waivers or adjustments.
The ink on the deal is barely dry so this doesn't necessarily mean China won't issue new waivers, but this is why the market isn't running away today.
China is supposedly going to buy an additional $200 billion in American goods on top of what they purchased in 2017 before Trump's trade war began and that would be a fantastical number even if there were absolutely no tariffs on the books.
It's going to be some time before we get a clear picture of what's really going to happen under this deal, but I am deeply skeptical that it will last through this election year without Trump applying his signature, reverse Midas touch to it. Even if China's large purchases slowly materialize, it may not happen quickly enough for Trump.