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Will China be Able to Honor its Phase One Trade Deal Commitment?

A senior US Treasury official sought to calm markets by reaffirming hope that China would be able to hold up its end of the phase one trade deal commitments despite the coronavirus outbreak. He, however, started that the virus was expected to lower China’s economic growth especially in Q1 2020, but that it was too soon to estimate the extent of the slowdown on the global economy.

The official made these remarks while speaking to Reuters, adding that China’s economic growth could recover in the next quarter as long as the outbreak is contained successfully. Earlier this week, the IMF also released similar statements when it commented that the spread of the virus beyond China could impact chances of recovery in other economies worldwide this year.

China is supposed to increase purchases of US goods and services by $200 billion over the next two years, but is presently focused on tackling the spread of the virus. The extended lockdown measures across various regions has created a significant dip in domestic demand while businesses are also grappling with the economic fallout of the virus.

Markets remain skeptical about whether China will be able to increase imports from the US by as high as extent as mentioned in the partial trade deal. However, according to a recent report on Global Times, China is expected to import 10 million tons of liquefied natural gas soon from the US as part of the trade agreement.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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