And the agreement does little to solve more damaging structural problems related to China`s approach, particularly its model of subsidizing and supporting major industries that compete with U.S. companies such as solar and steel. U.S. companies accuse these economic practices of flooding the United States with cheap Chinese products. A first pact that cooled tensions in an election year follows months of escalating tariffs and a trade war that seemed never to stop. The agreement limits more than two years of tense negotiations and increasingly intense threats, which at times appeared to have the effect of plunging the United States and China into a permanent economic war. Mr. Trump, who was running for president in 2016 promising to be tough on China, urged his negotiators to rewrite trade conditions that his party said would have destroyed U.S. industry and jobs, and he imposed record tariffs on Chinese goods to ensure Beijing complied with its demands. The RCEP signature brings together 2.2 billion people and covers 28% of RCEP`s world trade in a trade agreement for the first time between China, Japan and South Korea and covers 10 Southeast Asian countries, as well as Australia and New Zealand. This agreement represents an important turning point in U.S. trade policy and in the types of free trade agreements that the United States has generally supported.

Instead of reducing tariffs to allow trade in goods and services to meet market demand, the agreement leaves a record level of tariffs and forces China to buy some $200 billion worth of goods in two years. “Today, we are taking an important step we have never taken with China toward a future of fair and reciprocal trade with China,” Trump said at a White House ceremony. “Together, we are correcting the injustices of the past.” However, CSIS` Green says that the “critical game” historians might look back “is not beyond the 20th century lower tariffs, but 21st century definition of rules on data, reciprocity, digital commerce, where the United States is a critical player.” China`s monetary policy has been another hot topic, as China has deliberately kept its currency undervalued for years. However, China has moved towards a more market-based exchange rate, but China`s monetary policy is still under close scrutiny. Other issues affecting bilateral trade flows include China`s industrial policy, which favours state-owned enterprises, differences of opinion on China`s WTO obligations, and the lack of protection of U.S. intellectual property rights. Leaders of China and 14 other countries in the Asia-Pacific region have signed one of the largest free trade agreements in history, which includes 2.2 billion people and 30% of global economic output. Turkey has bilateral and multilateral agreements: President-elect Joe Biden said Monday that the United States must stick to other democracies to write the rules of world trade, not with China. The EU is in favour of opening trade relations with China. However, the EU wants China to act fairly, respect intellectual property rights and meet its obligations as a member of the World Trade Organization (WTO). Although the EU is currently in a trade deficit with China, European countries are exporting to other destinations; Indeed, the EU`s trade balance is generally positive. China, meanwhile, applauded rcep as a victory.