The U.S.-China trade deal President Donald Trump announced on Jan. 15 marks a temporary cease-fire in the trade wars he launched in 2018, but the deal's backdrop — the growing backlash against globalization — will persist, auguring a future where trade within regions becomes a bigger driver of growth, analysts say.
Economists predict Asia will prove resilient in that environment, even as countries such as Japan, South Korea and China have arguably been globalization's biggest winners over the past 60 to 70 years.
The U.S.-China "phase one" deal, which followed a spate of market-roiling U.S. tariff hikes and Chinese counter hikes over the past 18 months, included a Chinese pledge to increase imports of U.S. goods by $200 billion over the next two years and another to purchase $40 billion to $50 billion of agricultural goods each year.
A White House news release touched, in passing, on more intractable trade disputes, saying China also agreed, for the first time, to "end its practice of forcing foreign companies to transfer their technology to Chinese companies in order to gain market access." It went on to assert that China "will address numerous long-standing intellectual property concerns in the areas of trade secrets, trademarks, enforcement against private and counterfeit goods, and more."
With Mr. Trump facing a Nov. 3 election for a second four-year presidential term, analysts say politics was a key driver for both the timing of the deal and its details.
The deal suggests Mr. Trump wants to "put the trade war on the back burner until after the election" to focus on fighting the Democrats for now rather than the Chinese," said Keith Wade, London-based chief economist with Schroders PLC.
That could spell an "11-month quiet period" even if the deal looks to be more like a "short-term truce (than) a sustainable peace," said Eoin Murray, head of investment with London-based Hermes Investment Management.
International trade veterans, meanwhile, called the deal's targets for Chinese purchases of U.S. goods and services very aggressive, leading some to predict the trade ceasefire could prove short-lived.