US-China Phase One Trade Deal Implementation

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Azeez Mustapha

Updated: 13 October 2022

In an interview with Fox Business on Tuesday, White House economic adviser Larry Kudlow said China is implementing a phase one trade deal. “US Trade Representative (USTR) Robert Lighthizer is pleased so far with China’s completion of Phase 1 of the deal,” added Kudlow.

The USTR said in a statement that the parties considered steps China has taken to “bring about structural change” to better protect intellectual property rights, “remove obstacles” for US financial services and agricultural companies, and eliminate forced technology transfers. Chinese purchases of American goods were also discussed. It added: “Both sides see progress and are determined to take the steps necessary to ensure the success of the agreement.”

The Chinese Ministry of Commerce also confirmed that the parties had held “a constructive dialogue to strengthen the coordination of macroeconomic policies of the two countries.” Both sides “agreed to create the conditions and atmosphere for continuing to advance the implementation of the first phase of the China-US trade and economic agreement.”

These comments do not appear to have a significant impact on market sentiment. At the time of writing, the S&P 500 Index, which at the opening reached a new all-time high of 3,439 points, fell 0.07% on the day to 3,428 points.
US Consumer Confidence Dropped to 84.8
The Conference Board’s US consumer confidence index fell to 84.8 in August from 91.7, falling short of 93.2 expectations. The current situation index fell sharply from 95.9 to 84.2. INdex expectations also fell from 88.9 to 85.2.

“Consumer confidence declines in August for the second straight month,” said Lynn Franco, senior director of economic performance at The Conference Board. The Current Situation Index is down sharply, with consumers saying business and employment conditions have deteriorated over the past month.

Consumer optimism about short-term prospects and their financial outlook has also declined and continues to decline. Consumer spending has rebounded in recent months, but growing consumer concerns about the economic outlook and their financial health are likely to drive spending down in the coming months.