During his inaugural state visit to China in early November, President Trump appears to have been on a mission to rebuild bridges with Chinese Premier Xi Jinping. After spending most of the time since he came into office criticizing China of unfair trade practices, Trump took great pride in announcing a US-China trade deal worth $253 billion which was announced during Trump’s time in China.

Know more about Russia than your friends:

Get our free ebook on how the Soviet Union became Putin's Russia.

According to analysts at Bank of America, this raft of deals signals " improvement in the US-China trade relationship following the disappointment at the first US-China Comprehensive Economic Dialogue (CED) in July." The bank's global economics analysts Sylvia Sheng and Helen Qiao go on to note that the deal package is focused on "boosting China’s imports of US products and increasing Chinese investment in the US."

However, while the deals look to be structured to cause minimal offense with deals agreed falling into industries where "there is little direct competition between the two countries and meaningful employment impact in the US, namely the agricultural, aviation and electronics sectors."

US-China Trade Deal - A Look At The Numbers

Even though Trump was keen to celebrate the success of his China trip, as the Wall Street Journal reports, many of the contracts are not full contracts, some are multi-year deals, and others are just extensions of already agreed transactions.

The most significant deal signed did not even include a US company. As the WSJ reports:

"The biggest deal, an $83.7 billion Chinese direct-investment plan, didn’t even involve a U.S. company: state-owned China Energy Investment Corp. signed a preliminary agreement to invest in shale gas and chemical manufacturing in West Virginia. That headline figure would be invested over the course of 20 years."

And the second most significant US-China trade deal, a $43 billion estimate of construction costs for an Alaska natural-gas project is not even agreed yet. The US and Chinese companies involved will sit down to work out the terms of any contracts next year.

Additionally, there is the issue BAML does not bring up. Do Americans want the Chinese Government buying assets in America? Just ask Australia, Canada and many African nations for a discussion on the topic. But I digress.US-China Trade Deal

BoA's analysts calculate that around half the US-China trade deal, $132 billion, consists of long-term investment deals stretching over several years while some of the deals may include previously agreed orders, with little additional impact on trade numbers. Overall, even though the headline number of $253 billion might seem impressive, in reality, the agreed deals will have a relatively minor impact on US trade. As BoA's team notes:

"Even if all the non-binding MoUs materialize and excluding the Boeing deal, we estimate the total boost to China’s imports from the US from the trade deals is only around $10 billion each year, representing less than 3% of the bilateral trade deficit of $347 billion in 2016."