President Donald Trump has threatened to walk away from a trade truce between the US and China reached in January 2020, citing Beijing’s inability to reach the agreed terms. Phase 1 of this trade agreement is expected to commence in early May, however, the ongoing coronavirus pandemic has complicated the situation.
According to the agreement, China has agreed to buy an additional $200 billion in US goods and services over two years compared with 2017 sales. However, global supply chains have suffered greatly due to COVID-19 and China’s purchases have fallen behind the expected levels. Reaching the $200 billion mark was already a challenge given that US exports to China had fallen in 2018 and 2019 prior to the outbreak of COVID-19. Moreover, China’s imports from the US have declined by 5.9% during the first quarter of 2020.
Relations between the U.S. and China have deteriorated further since America became one of the countries hardest hit by COVID-19. The Trump administration has stepped up rhetoric that COVID-19 was created at a lab in Wuhan, China. China’s foreign ministry has, in turn, accused some US officials of shifting responsibility for the poor handling of the pandemic onto others.
