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The US and China strike a deal

The US and China strike a deal

Nearly two years after the Trump administration launched its trade war against China, President Trump and Chinese Vice-Premier Liu He will sign a deal in Washington on Wednesday. The full details are still murky, but here is what the so-called "phase one" deal between the world's two biggest economies is expected to include:

China will commit to buy billions of dollars of US oil, cars, aircraft, agricultural products and other goods over the next few years. It will also pledge to better protect US companies' intellectual property and technology secrets.

The US will halt the next scheduled round of tariffs on Chinese imports and reduce some other levies it imposed in September by half. It has already removed China from a list of "currency manipulators" this week ahead of the signing ceremony, a goodwill gesture important to Beijing.

The two countries may also agree to begin talks about a bigger "phase two" deal later this year, but completion of that deal is unlikely until after the 2020 US election, if ever. China's leaders won't make big concession to a president who may be out of office within a year. They may never offer changes that demand fundamental shifts in China's economic model.

Yet, this week's agreement will give Trump an election-year deal he can sell as a boon for US farmers and factory workers. Xi Jinping will get some welcome relief from US tariffs at a time when China's economy is slowing and he faces political setbacks elsewhere.

Here's what won't change:

The US will keep in place most of the tariffs it has levied on more than $360 billion of Chinese imports since March 2018 (and reserve the right to reimpose other levies if China doesn't abide by the deal). China will keep billions of dollars of retaliatory tariffs on US goods.

China will continue other policies that the US does not like. It will continue to subsidize its domestic technology companies and pursue ambitious state-driven industrial policies that Beijing hopes will transform China into a global technology and advanced manufacturing power.

The US will keep Chinese tech giant Huawei on a Commerce Department blacklist and continue to try to limit the flow of advanced US technology to a country that it considers a strategic adversary.

Bottom line: These lingering pressures, along with inevitable disagreements between the US and China about how the deal should be implemented and enforced, will create further friction between the two countries, complicating efforts to fully resolve this complex trade and technology dispute.

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Learn more about how carbon created life on Earth in the second episode of Eni's Story of CO2 series.

As we enter the homestretch of the US presidential election — which is set to be the most contentious, and possibly contested, in generations — Americans are also voting on 35 seats up for grabs in a battle for the control of the Senate. The 100-member body is currently held 53-47 by the Republican Party, but many individual races are wide open, and the Democrats are confident they can flip the upper chamber of Congress.

Either way, the result will have a profound impact not only on domestic policy, but also on US foreign relations and other issues with global reach. Here are a few areas where what US senators decide reverberates well beyond American shores.

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On September 23, GZERO Media — in partnership with Microsoft and Eurasia Group — gathered global experts to discuss global recovery from the coronavirus pandemic in a livestream panel. Our panel for the discussion Crisis Response & Recovery: Reimagining while Rebuilding, included:

  • Brad Smith, President, Microsoft
  • Ian Bremmer, President and Founder, Eurasia Group & GZERO Media
  • Jeh Johnson, Partner, Paul, Weiss, Rifkind, Wharton & Garrison, LLP and former Secretary of Homeland Security.
  • John Frank, Vice President, UN Affairs at Microsoft
  • Susan Glasser, staff writer and Washington columnist, The New Yorker (moderator)

Special appearances by UN Secretary-General António Guterres, European Central Bank chief Christine Lagarde, and comedian/host Trevor Noah.

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Jon Lieber, who leads Eurasia Group's coverage of political and policy developments in Washington, offers insights on the Supreme Court vacancy:

Will Senate Republicans, who stopped a Supreme Court nomination in 2016, because it was too close to an election, pay a political price for the change in tactics this time around?

Not only do I think they won't pay a political price, I think in many cases, they're going to benefit. Changing the balance of power on the Supreme Court has been a career-long quest for many conservatives and many Republicans. And that's why you've seen so many of them fall in line behind the President's nomination before we even know who it is.

At this point, do Senate Democrats have any hope of stopping President Trump from filling the ninth seat on the Supreme Court?

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In a special GZERO Media livestream on global response and recovery amid the COVID-19 pandemic, Eurasia Group & GZERO Media president Ian Bremmer discussed the difference between Europe's unified approach to economic stimulus and the deeply divided and political nature of the current conversation in the US. While initial stimulus support was bipartisan, there is little chance of Democrats and Republicans coming together again ahead of the November 3 presidential election. "It's red state versus blue state. President Trump's saying that coronavirus isn't so bad if you take the blue states out. He's president of the blue states, you can't take the blue states out," Bremmer told moderator Susan Glasser of The New Yorker.

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Panel: How will the world recover from COVID-19?

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