U.S.-China Trade Deal Inked Who’s Next on President Trump’s Agenda

U.S. President Donald Trump and China’s Vice Premier Liu He signed Phase One of the trade deal in mid-January. With the dispute somewhat settled, both governments have now started negotiating the second phase of the agreement. 

Although that has somewhat reduced global trade tensions, other conflicts are already heating up. Here is what U.S. President Trump could do next:

Europe: a dispute over subsidies and digital taxes

The U.S. and the European Union (EU) remain at odds over a range of issues, including trade barriers, aircraft subsidies, and plans by the EU to introduce taxes on digital services. 

Washington has already imposed a 25% tariff on a range of European goods and a 10% tariff on aircraft and said it would raise those tariffs if the EU does not address the subsidies. 

As far as digital taxes are concerned, U.S. Treasury Secretary Steven Mnuchin said Italy and Britain would face tariffs if they impose digital taxes. France had already agreed to suspend a 3% digital tax on U.S. tech companies, which resulted in the U.S. holding off tariffs on French imports.

U.K.: Digital tax plans have hindered negotiations for the new trade deal 

Like the EU, the U.K. has also announced a digital tax, which has led to conflict with the U.S. Both Mnuchin and Trump threatened to put tariffs on imports from Britain if a digital tax comes into effect. Still, the U.K.’s finance minister said it would go ahead with the tax in April regardless. Trump had previously promised a “massive” new trade deal with the U.K., but the dispute over digital taxes has slowed down negotiations. 

India: the U.S. opposed to digital trade restrictions 

Since June 2019, India is not enjoying its special trade status under the Generalized System of Preferences anymore, which affects about $5.6 billion worth of Indian exports to the United States. The reason for this change in policy was a dispute over India’s new digital trade restrictions. Both governments now work on a renewed trade deal, although negotiations came to a halt amid tariffs on U.S. farm products and approval schedules for Indian pharmaceuticals.

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