6 Months Later, Trump’s China Trade Deal Has Become A Liability
July 15, 2020
After losing the trade war he started, Trump settled for a phase one deal that left the biggest issues with China unaddressed in exchange for purchases to boost his reelection chances. To secure the deal, he praised China’s handling of the coronavirus and failed to take action to slow its spread, which contributed to the deaths of more than 135,000 Americans and the worst recession since the Great Depression. Now the purchases aren’t happening and neither is the phase two deal Trump promised would take care of all the issues he kicked down the road.
From the day he announced his campaign, Trump made China a central part of his presidency and staked his reelection on his trade deal. But six months after signing the deal, it has now become a liability. Trump got played by China. Despite his lies, Trump’s deal was a failure, and workers and farmers have paid the price.
Yesterday, Trump said he’s “not interested” in negotiating a phase 2 deal and claimed farmers are doing “very well” because China is “buying a lot.”
TRUMP: “I’m not interested right now in talking to China.”
TRUMP: “Our farmers are doing very well because we made really great trade deals… the China deal, they’re buying a lot. They’re buying a lot, I will say that. They’re buying a lot. A lot of people ask ‘how are they doing on the trade deal,’ they’re buying a lot.”
Trump settled for a phase one deal that left the biggest issues unaddressed in exchange for purchases to help his reelection, but they aren’t happening.
Los Angeles Times: “New U.S.-China Trade Deal Leaves The Thorniest Problems Unresolved”
Bloomberg: “By the end of May this year, China had only bought about 19% of the total purchase target of more than $170 billion for goods in 2020, according to Bloomberg calculations based on Customs Administration data. That means China needs to buy about $139 billion in the remainder of the year to meet the terms of the agreement signed in January.”
The White House said many of the big structural issues with China would be dealt with in phase two, but now that isn’t happening either.
Wall Street Journal: “After completing the phase-one deal, the U.S. had said it would wait for future phases to negotiate on some of the most difficult issues—such as Beijing’s pressure on U.S. businesses to share technology with Chinese partners, and China’s heavy subsidization of many of its domestic companies. Those issues were not part of the deal signed in January. At the time, Mr. Trump said that the U.S. and China would begin negotiating phase two ‘right away.’”
Farmers are not doing well. They saw bankruptcies reach a near-decade high in 2019, and Trump’s deal is already proving to be a loser for farmers.
CNN: “US farm bankruptcies were up 20% in 2019, despite the billions of dollars in aid President Donald Trump has paid to farmers hurt by the trade war with China. That’s the highest level since 2011, following the Great Recession, according to court data analyzed by the American Farm Bureau. There were 595 Chapter 12 family farm bankruptcies, nearly 100 more than in 2018, the trade group said.”
Stateline: “Buffeted by a two-year trade war, followed by a disappointing — at least so far — trade deal and then a worldwide pandemic, there aren’t a lot of farmers, or rural communities, feeling flush right now. Worried farmers and business groups are urging the United States and China to fulfill their obligations under the first stage of the trade agreement, even as the coronavirus scrambles its assumptions. ‘I’m worse off today than I was before the trade war,’ Stafslien said, ‘and I don’t see an end in sight.’”