The recently signed “phase 1” trade agreement between the United States and China is being hailed as a significant step towards resolving their ongoing trade dispute. After months of tense negotiations, the two countries have agreed to a number of measures designed to boost American exports and loosen China`s stringent regulation of its economy. Here`s what you need to know about this historic agreement:

What does the agreement entail?

The phase 1 trade agreement addresses a range of issues that have been at the heart of the trade dispute between the US and China. Most notably, China has agreed to purchase an additional $200 billion worth of American goods over the next two years. This includes $77 billion in manufactured goods, $52 billion in energy products, $32 billion in agricultural goods, and $38 billion in services. China has also pledged to strengthen its intellectual property protections, increase access to its financial services sector for American companies, and to refrain from currency manipulation.

In exchange, the US has agreed to reduce the tariffs it had imposed on Chinese goods. While most of the tariffs will remain in place, the US has agreed to lower the tariff rate from 15% to 7.5% on approximately $120 billion worth of Chinese imports. The US has also agreed not to impose any new tariffs on Chinese goods.

What are the implications of the agreement?

The phase 1 trade agreement is certainly a positive development in the US-China trade relationship, and could help to reduce tensions between the two countries. By increasing its purchases of American goods, China is showing a willingness to work towards a more balanced trade relationship with the US. This could help to alleviate some of the pressure on American manufacturers and farmers who have been hurt by the trade war.

However, the trade deal does not address some of the more fundamental issues between the two countries, such as China`s state subsidies and its use of forced technology transfers. These issues will likely be addressed in future negotiations, but it remains to be seen how successful those talks will be.

Overall, the phase 1 trade agreement represents a significant milestone in the US-China trade dispute. While there is still a long way to go before the two countries can fully resolve their differences, this agreement is a step in the right direction and provides some hope that the trade war may be drawing to a close.