Governments across the world breathed a collective sigh of relief when the US on Wednesday signed a partial trade deal with China, but analysts predict that the pact frees President Donald Trump up for new trade war fronts, notably with the EU and emerging economies.

"This deal may cause short-term relief, but it's just a stage," said Sylvain Broyer, European chief economist at Standard and Poor's, calling it "the tip of the iceberg" of global trade tensions.

"Trade tensions could move on, and Europe could find itself at the centre of the debate," he said.

EU officials remember only too well the tariffs the World Trade Organization (WTO) allowed Washington to slap on European products in retaliation for rule-breaking subsidies paid to the Airbus aircraft maker.

Another reminder of Trump's willingness to weaponise trade came Thursday when Germany's defence minister confirmed a report that the US was threatening to impose a 25 percent tariff on EU car exports if European governments continued to back the Iran nuclear deal.

- Stuck in the middle? -

"The question is now how the US behaves towards towards Europe," said Johan Bjerkem, an analyst at the European Policy Centre in Brussels.

The trade deal between China and the United States is "a good thing", said Evelyn Herrmann, director at BofA Research, "but there are plenty of other things going on that we can't ignore".

A visit to Washington by EU trade chief Phil Hogan just as the US and China signed their truce could be seen as an early attempt to head off any coming transatlantic tensions, analysts said.

"Everyone is pleased that we've emerged from a logic of escalation, but we don't yet know what the impact will be," one EU source said. "After the (US-China) deal we must make sure that the EU does not find itself stuck in the middle."

The most likely trigger for any future trade moves against the EU is a tax on the revenues of internet giants decided last year by France, that the Trump administration sees as discriminatory, analysts said.

"If the US administration decides to take trade measures against France, and therefore against the EU, this would turn into an international question," said one French finance ministry source.

"The EU would defend its rights in a determined and proportionate way against American measures that would be illegal in the eyes of the WTO."

- The price of peace -

There is every chance that emerging economies could get caught up in new international trade tensions, said Gareth Leather at Capital Economics.

"Last year, President Trump called Vietnam 'almost the single worst abuser of everybody' and threatened tariffs unless more was done to reduce its bilateral trade deficit," Leather said.

Thailand was also drawing Washington's unwanted attention, he said, and is in danger of being labelled a "currency manipulator" to be punished with trade measures, just like China was previously, he said.

Emerging countries must now also fear the consequences of a Chinese commitment to buy $200 billion worth of additional US products over the next two years, as Beijing is now likely to cancel farm contracts with countries like Brazil and buy American instead.

"The deal could have negative trade consequences for Brazilian farm product exports to China," said Pedro da Motta, head of the Cindes think tank, singling out soy beans. "The same sectors that benefitted from the trade war may be the ones paying the price for peace," he told AFP.

Brian Coulton, chief economist at Fitch Ratings, cautioned that implementation of the deal and its impact on the rest of the world were still uncertain.

"Its full impact will depend on how the deal is implemented, including whether China can meet its commitment to dramatically increase imports from the US, as well as possible trade diversion effects on other exporting economies," Coulton said.

US tech sector sees only modest relief in China trade deal
Washington (AFP) Jan 16, 2020 - The US tech sector is getting some relief from a trade truce with China signed this week, but the deal leaves many of the industry's concerns unresolved.

The "phase one" agreement signed by President Donald Trump on Wednesday canceled $160 billion in tariffs on Chinese goods, which could have impacted electronics like cell phones and computers and been especially painful to US consumers, but leaves many new tariffs in place.

The pact also provides some improved patent protections for US technology.

Robert Atkinson of the Information Technology and Innovation Foundation, a think tank which often aligns with the tech industry, said the deal only partly resolves some of the issues around technology between the two powers.

The deal "represents good progress toward curbing the systemic problems of intellectual property theft and forced technology transfers in China," Atkinson said in a statement.

"But some of the thorniest issues confronting innovation-driven industries are still on the table, including the lavish industrial subsidies China showers on its companies, including its state-owned enterprises."

Atkinson added that it remains unclear how the phase one agreement will be enforced, noting that "China has shown itself to be a master of obfuscation when it comes to living up to its agreements."

- Undoing the damage -

Gary Shapiro, president of the Consumer Technology Association, said the deal will not undo the damage from the tariffs already imposed by the president.

"Tariffs are taxes on Americans -- not the Chinese," Shapiro said.

"The postponement of tariffs is a temporary reprieve on many of Americans' favorite tech products. But market uncertainty remains until we see permanent tariff removal -- or return the billions of dollars our nation has paid because of these tariffs."

According to the association, which represents some 2,000 large and small tech firms, tariffs have added about $19.2 billion to the cost of tech product imports through November 2019, including nearly $1.7 billion for products critical to 5G deployment.

Chris Mitchell of IPC, an association representing the electronics manufacturing industry, welcomed the agreement as a "pathway" to resolution of broader issues.

But he added: "The deal leaves many issues unaddressed including cybersecurity, structural economic reforms, and the high level of tariffs that are still in place on many products that are traded in our industry."

Peter Navarro, a White House trade official, said the deal signed in Washington addresses a key issue for the tech sector on theft of trade secrets, or intellectual property.

"They'll steal things, it's very destructive to our businesses. They promised back in 2015 to stop doing it. They didn't stop doing it," Navarro told CNBC television.

"We got a great start on these structural issues."

- Tougher questions ahead -

The trade agreement "is just the first stage of what will be a protracted process, but it looks likely that a working relationship will be established," said Richard Windsor, an analyst following the tech sector and who writes the Radio Free Mobile blog.

Windsor said the two governments are still battling over the question of leadership of the global tech sector, and must resolve questions around Huawei, which Washington has accused of supporting Chinese espionage.

"While tensions appear to be thawing on trade, the rivalry over technology standards is heating up and I continue to see many other countries being forced to make a choice between two separate supply chains," the analyst said.

Susan Aronson, a George Washington University professor who specializes in international trade, called the pact "mediocre" and said it fails to deal with fundamental issues.

Aronson said the deal does nothing about the "Great Firewall" which China uses to control its online ecosystem nor does it address the rise of Chinese tech giants which operate under a different set of rules governing data protection.

"China wants to set the standard for governance of data, and we are moving into an economy where more firms use personal data to improve their products and services," she said.

The deal also is flawed because it is "discriminatory toward other nations," according to Aronson.

"The US should join the EU and Japan and other like-minded nations and say China should become a free-market economy with a transparent set of rules," she said.

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What's next after the US-China 'phase one' deal?
Beijing (AFP) Jan 16, 2020
The "phase one" trade deal between Washington and Beijing was the result of long, fraught negotiations. "Phase two" is likely to be just as bumpy and unpredictable. The agreement signed by President Donald Trump and Vice Premier Liu He in Washington on Wednesday marks a ceasefire in the nearly two-year-old trade war. But many questions remain. Here are some of them: - Who won? - The deal "makes both countries look good", Moody's Analytics economist Xu Xiaochun told AFP. The US presi ... read more