China-US Trade Deal -- January 15, 2020

The numbers are huge. China has pledged to boost its purchases of US goods and services over the next two years by $200 billion over 2017 levels:

• that $200 billion is an increase of more than 50%
• agricultural purchases: $32 billion
• manufactured goods: $78 billion
• energy products: $52 billion
• additional US services: $38 billion

This is what I find most remarkable in that list: energy.

Up until recently the US was a net oil importer. The US is now producing record amounts of oil and has the capacity to meet the Chinese demand for oil. This would not have been true some years ago when we were told we cannot simply drill our way to lower oil prices. On the blog, search doofus-in-chief.

On another note, from NPR (consider the source):

But steep 25% tariffs remain in place on much of what the U.S. buys from China, including components that American factories use to assemble finished products. While Trump insists that China is paying those tariffs, numerous studies have found the costs are largely borne by American importers.

And numerous analysts have not seen that Americans are affected all that much -- if at all -- by American importers. If there has been an increase in retail products due to tariffs, I haven't seen it. It appears that the real costs affecting Americans are healthcare costs; housing costs; college tuition; new automobiles. None of these are due to tariffs on Chinese imports.

Most amazing: Trump took a huge political risk pursuing this fight. The agricultural sector was hit very, very hard by the tariffs, but if deal holds as signed this is huge for the agricultural sector.