The "phase one" trade deal between the U.S. and China, supposedly a game changer for the global economy going by the stock market's rise to a record after the announcement, has left many analysts and investors puzzled about what was specifically agreed to by both sides.
Skepticism is brewing in the markets as much of the details have not been confirmed by both sides. China, in particular, has been reluctant to commit to the amount of agriculture products it's willing to buy, while big numbers are floating from Washington. Beijing has also been quiet about tariffs on U.S. goods as well as an enforcement mechanism.
"There remains more questions than answers," Chris Krueger, Washington strategist at Cowen, said in a note. It's "more trade truce than deal ... It is unclear if any China tariffs on U.S. goods have been reduced ... Vague promises on IP protections."
Chinese officials were light on the deal content when unveiling the text of the agreement. In a news conference Friday, they said Beijing will increase agricultural purchases "significantly" without specifying by how much. Meanwhile, U.S. Trade Representative Robert Lighthizer said China pledged to buy a total of $40 billion in farm goods over a two-year period. President Donald Trump touted "massive" buying – $50 billion — from China will start "pretty soon."
"US agriculture is a key signpost to monitor as the Phase 1 deal appears to be 'ag centric' and may moderately boost US crop prices and volatility, " Cesar Rojas, global economist at Citi, said in a note. "However, uncertainty persists about the actual volumes of Chinese soybean, grain and pork purchases, with details on firm commitments lacking and likely to be worked out and also 'phased in' over a few years."
In a regular news briefing Wednesday, Chinese Foreign Ministry spokesperson Geng Shuang repeatedly dodged questions on the terms of the phase one trade deal, according to a transcript on its website.
"I have no further news at this time and there is nothing to update," Geng said Wednesday in Beijing, when asked about the U.S. target of $40 billion to $50 billion in agriculture products.
China's Ministry of Commerce also on Wednesday published its economic priorities for 2020, which only mentioned the trade conflict with the U.S. in passing. Again, it contained no deal details.
In an outline of its "six priorities, plus one" for next year, China listed "properly dealing with China-U.S. trade disputes" without elaborating further.
The two sides are in the process of simply translating the text of the deal, Lighthizer maintains, adding they are aiming to sign the accord in early January. Chinese officials said the final step is to complete the legal and translation work before signing.
The U.S. offered a two-page fact sheet on Friday, stating the deal addresses "intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange" and "includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years."
Trump also said the U.S. would begin negotiations on the next phase of the trade deal "immediately," rather than waiting until after the 2020 election. China has not commented on the status of a phase two agreement.
— CNBC's Michael Bloom contributed reporting.