Trump Got Played By China On Phase 1 And Has Now Given Up On Phase 2
July 13, 2020
Trump settled for a phase one trade deal that left the biggest issues with China unaddressed in exchange for purchases to help his reelection. Now the purchases aren’t happening and neither is a phase two deal.
After losing the trade war he started, Trump settled for a phase one trade deal that failed to address the biggest trade issues with China.
Los Angeles Times: “New U.S.-China Trade Deal Leaves The Thorniest Problems Unresolved”
CNN: “Trump had already announced the broad contours of the ‘phase one’ deal in October, and the two sides have been haggling over specifics since then. The ‘phase one’ deal does not address the major structural changes to China’s economy that Trump has sought.”
The White House said many of the big structural issues with China would be done in phase two, which Trump said they’d begin negotiating “right away.”
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.’”
LIGHTHIZER: “Creating rules that benefit all of us is in our interest. We haven’t done that yet.”
Trump got played—China isn’t living up to its meager phase one purchase commitments or promises on intellectual property theft.
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.”
Wall Street Journal: “With six months of the year completed, it is nowhere near the pace necessary to hit the goals by year’s end. China is especially far away from meeting the goal for energy purchases, owing in part to a plunge in energy prices that has lowered the dollar total of any Chinese purchases.”
NAVARRO: “To be honest right now, the purchases are lagging but we believe that they will catch up by the end of the year if they keep their word. But this is—Trace, this is about a lot more. And the trade deal wasn’t really a trade deal, it was about getting China to stop stealing our intellectual property, forcing technology transfers, things like that. And we know now that even as we speak, they’re trying to steal the intellectual property for vaccine development for the China virus.”
Now, Trump says a phase two deal with China isn’t going to happen.
Bloomberg: “President Donald Trump said a phase two trade deal with China isn’t under consideration, saying the relationship between Washington and Beijing has deteriorated too much. ‘I don’t think about that,’ Trump said Friday when asked about the possibility of a second round of trade agreements with China. ‘The relationship with China has been severely damaged.’… When the two nations agreed to the first phase trade deal in January, Trump said that talks on a second phase could start right away but might not finish until after the Nov. 3 general election. Since then, the two countries have been wrangling over the implementation of the initial agreement, and Phase 2 was contingent on the first rounds going well.”