World’s biggest deal has happened between two countries, to directly impact economy, millions of people will be…
US-China Trade Agreement: In a major development, a crucial agreement has been signed between the United States and China on the trade framework. Both countries finalised the terms that were discussed in Geneva. According to experts, the deal was done so quickly because America’s economic condition is deteriorating at a fast pace, and GDP growth has plunged into negative territory.
What Are The Major Points Of The Deal?
As per the deal, Beijing will supply rare earth minerals to the US, essential for several sectors such as jet engines, wind turbines and electronics. In return, America agreed to remove all the trade restrictions, including all taxes. Notably, the US imposed trade tariffs on China before the London talks.
US Trade Agreement
America is planning to finalising trade agreements with as many as 10 major countries. These deals will be done before the reimposition of high tariffs. The deadline is July 9.
A wave of happiness swept through global markets, as Asian stock markets and European futures saw a rise. Global equity index reached a new record, due to trade deal expectations. Who are the other potential trade partners of America and India?
Global Markets Welcomed The Decision
A wave of happiness has swept through global markets. Asian and European markets opened and remained in the green throughout the day on Friday. Global equity index reached a new record, due to trade deal expectations.
Is US Planning Trade Deal With India?
A delegation led by Rajesh Agarwal is negotiating the deal in Washington on behalf of the country. Recently, United States President Donald Trump hinted at a ‘Big Deal’ with India. However, Japan’s trade representative Ryosei Akazawa has said that they cannot accept the 25% car tariff proposed by the US. ” We are continuously making serious efforts on the tariff proposals of the US,” Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said during a media briefing.
What Complications Does US-China Deal Have?
The deal between China and the US is not a comprehensive trade agreement. It means that the deal has several issued in it like – American exporters have a level playing field in the Chinese market. There are still concerns related to fentanyl drug trafficking.
Another example is: US has allowed companies to export ethane gas to China, but with a condition that it cannot be exported there without approval.
What Will Be The Impact On India?
The new US-China trade deal includes steps like the supply of rare earth, reducing tariffs, and agreeing on new terms. It is crucial step towards reducing tensions between the two countries. However, in recent years, when the trade war between US-China was at its peak, India benefited.
During the trade war, America had imposed tariffs on several Chinese goods. Following this Indian companies (such as textiles, pharma, engineering) got the opportunity to export their products. Now if America is agreeing on importing goods from China, some of India’s export sectors may feel the heat.
China Dominates The Supply Of Rare Earth Minerals
It is worth noting that the Dragon dominates the rare earth minerals market. These minerals are used in electric vehicles, solar panels, chips and defence equipment.
If China resumes the supply of rare earth to America, then India will also get the benefit of stability in prices.
The United States is negotiating a potential trade agreement with ten nations, including a possible agreement with India. This agreement could grant India preferential trade access. Easing US-China tensions is boosting global investor confidence, potentially leading to increased foreign portfolio investment and stock market growth in India.
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