China Markets trade

It Was The ‘Biggest Deal Ever Made.’ Now Trump Doesn’t Even Think About It

C'est la vie.

“I don’t think about it now”, a despairing Donald Trump told reporters aboard Air Force One Friday, on a flight to Florida.

He was referring to “phase two” of the trade agreement with China, which the president variously touted as the “biggest deal ever made” in better times.

Before the ink was even dry on “phase one” (signed in January at an overwrought ceremony in Washington), the administration was keen to suggest that work on “phase two” would begin immediately.

 

At the time, skeptical analysts wondered if the first phase amounted to anything more than a set of nebulous promises — codified, yes, but the furthest thing from binding.

Once COVID-19 hit, most serious observers declared it impossible for China to live up to its commitments under the arrangement, which entails Beijing purchasing tens of billions in manufactured, farm, and other goods above 2017’s levels, which were established as a baseline.

Over the course of the pandemic, Trump administration officials tried to remain optimistic in public about the deal, insisting it can be kept separate from the myriad punitive legislation on Capitol Hill aimed at punishing China for a laundry list of grievances including accusations that the Party engaged in a coverup related to the virus.

Late last month, in a market-moving gaffe, Peter Navarro declared the deal dead during an interview with Fox. He quickly issued a “clarification”, but nobody was buying it. There will be no further progress on the deal and it would take a miracle for China to make good on its year-one promises.

“The relationship with China has been severely damaged”, Trump said Friday. “They could have stopped [the virus]. They didn’t”, he added.

That is increasingly the administration’s preferred position. The narrative is that COVID-19 was, at best, an escapee from the Wuhan Institute of Virology and, at worst, deliberately “unleashed” on the world, as Navarro puts it.

In mid-June, China appeared to be ramping up purchases of agricultural products in a mad dash to at least make good on that part of the trade agreement. Somehow, Beijing is expected to bridge the gap between the blue and orange bars in the figure (below) by December.

As of last month, China was just 13% of the way to meeting its commitments for 2020 on farm purchases. Orders were running around 40% below the pace from 2017.

In his memoir, John Bolton claims that during a conversation with Xi at the 2019 G-20 in Osaka, Trump directly linked Chinese purchases of US farm goods to the 2020 election. Trump denies that, but has admitted to delaying sanctions against Chinese officials for human rights abuses in the interest of keeping the trade deal in play.

The situation has escalated in recent days, though. On Thursday, the US sanctioned Chen Quanguo, party secretary in Xinjiang who sits on the Politburo. It was the highest-level sanction ever dealt in the country, US officials said.

At this point, it’s not clear whether key constituencies would even notice if China were to make a run at fulfilling some of its promises. Farmers have likely already made up their minds about whether the trade war was worth the sacrifice, and nothing that happens between now and November will change their opinion on the matter.

While some believe Joe Biden will adopt a less abrasive stance towards Beijing, that is an open question. It’s likely a Biden administration would do things differently, but “blame China” is a message with bipartisan appeal.

As documented here on Wednesday, “Cold War 2.0” isn’t going away — no matter who occupies the Oval Office.

Read more: ‘Cold War 2.0’ Isn’t Going To End. No Matter Who Is President

0 comments on “It Was The ‘Biggest Deal Ever Made.’ Now Trump Doesn’t Even Think About It

Speak your mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to toolbar