The signing of a partial trade agreement between the U.S. and China means goods and services will flow again, but uncertainties could still weigh on the global economy in 2020, according to reports Wednesday (Jan. 15).
The truce on the trade war comes by way of an eight-part agreement that still leaves about $370 billion in tariffs on Chinese goods — roughly 75 percent of Chinese imports to the U.S.
President Donald Trump said the tariffs “will all come off” as long as the two countries enter into a second agreement. Trump proclaimed that “Phase One” of the deal is an important milestone.
The deal includes commitments by China to buy $200 billion of U.S. goods, including some $50 billion in agricultural products over two years.
“Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade as we sign Phase One of the historic trade deal between the United States and China,” Trump said.
Chinese Vice Premier Liu He signed the agreement for Beijing.
“China has established a political system and an economic development model that suits its own characteristics,” Liu said. “But that doesn’t mean China and the U.S. can’t work together.”
There is no timetable for further talks, and the agreement is not expected to be finalized before the U.S. presidential election in November.
Treasury Secretary Steven Mnuchin told CNBC that Trump could reimpose tariffs in the event that China reneges on its commitments.
Microsoft President and Chief Legal Officer Brad Smith expressed concerns that the trade tensions between China and the U.S. could lead to a technology “cold war,” according to Bloomberg.
“The Chinese market is not and has never been fully open to U.S. companies,” Smith said, adding the strains with China are bipartisan and the next presidential election won’t change that. He questioned whether “the two countries are heading to a technology cold war.”
In other China-related news, the country is in the process of finalizing its first rules for online-only banks. The rules come at a time when data privacy is a hot topic and artificial intelligence and online banking technologies alter China’s financial services terrain “from processing payments to selling investment products.”
A group of investors led by Elon Musk reportedly submitted a bid to OpenAI’s board of directors Monday (Feb. 10) to buy the nonprofit that controls the company for $97.4 billion.
The unsolicited offer was submitted by Musk’s lawyer, Marc Toberoff, The Wall Street Journal (WSJ) reported Monday.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement provided to WSJ by Toberoff, per the report. “We will make sure that happens.”
OpenAI CEO Sam Altman wrote in a Monday post on X: “no thank you but we will buy twitter for $9.74 billion if you want,” referring to the Musk-owned X by its former name and offering one-tenth the price the group offered for the OpenAI nonprofit.
Musk and Altman are already engaged in a court battle over the future of OpenAI, which they co-founded as a charity in 2015, according to the WSJ report.
After Musk left the company and Altman became CEO, OpenAI created a for-profit subsidiary that has enabled it to raise money from Microsoft and other investors, the report said.
Now, Altman is turning the subsidiary into a traditional company and spinning out the nonprofit, which would own a stake in the for-profit firm, per the report.
Musk’s bid sets a high valuation on the nonprofit and could mean that the operator of the nonprofit would have a large and possibly controlling stake in the for-profit firm, the report said.
Toberoff told WSJ that the investor group will match or exceed any higher bids offered for the nonprofit, per the report.
It was reported Feb. 4 that Musk’s suit against OpenAI might proceed to trial, as a judge said parts of the case can move forward.
“Something is going to trial in this case,” U.S. District Judge Yvonne Gonzalez Rogers said. “[Elon Musk will] sit on the stand, present it to a jury, and a jury will decide who is right.”
Musk has argued that OpenAI’s switch to a for-profit company goes against its original mission, while OpenAI has countered that the switch is necessary to help it land the type of investments it needs to develop the best AI models.