Trump To Celebrate Trade Deal That Accomplishes Next To Nothing
January 15, 2020
Today, Trump will celebrate a “phase one” trade deal with China that accomplishes next to none of his original objectives and does not alleviate the billions of dollars in costs to American businesses and consumers that his policies with China have already caused.
Trump made major concessions without getting China to make the structural reforms to its economy he promised.
New York Times: “The Trump administration formally removed China’s designation as a currency manipulator on Monday, offering a major concession to the Chinese government as senior officials arrived in Washington to sign a trade agreement with President Trump.”
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.”
Washington Post: “Indeed, the president said last week that talks aimed at a second deal that would address China’s industrial subsidies and other economic policies might not bear fruit until after the November election.”
Trump’s China tariffs will continue to cost American businesses and consumers billions of dollars a year and do little to quell uncertainty.
Washington Post: “Even as the White House celebrates the president’s negotiating accomplishment, the ‘phase one’ deal offers little relief for countless American businesses — including chemical makers, apparel retailers and auto parts manufacturers — that will still face the same punishing tariffs they have confronted for some time.”
Bloomberg: “A study by researchers at the New York Fed and Princeton and Columbia universities estimated the cost to consumers of the bulk of tariffs that will remain in place, despite the latest deal, at $831 per household per year — or an annual cost of more than $106 billion for the U.S. economy as a whole.”
Most of the tariffs and retaliatory tariffs that have decimated U.S. manufacturing and hampered growth will remain in place
Reuters: “Research from the U.S. Federal Reserve and other top economists shows that U.S. tariffs on Chinese industrial components and materials, which largely won’t be lifted by the deal, are proving especially damaging to American manufacturing competitiveness and jobs.”
Bloomberg: “China, on the other hand, didn’t agree to specific tariff reductions in the deal. Instead, the nation’s obligation is to make the purchases and to have an exclusion process for its tariffs.”
Trump’s China tariffs have hurt U.S. exports to China more than they’ve reduced imports from China.
Wall Street Journal: “China’s 12.5% decline in exports to the U.S. last year would have narrowed the U.S. deficit more, but Chinese imports from the U.S. dropped even faster. Beijing retaliated against Washington, imposing tariffs on American goods and directing state-owned companies to buy less from what had been its largest single-nation trading partner. China’s imports from the U.S. fell nearly 21%.”