Why's US insisting on sizeable hard commitment of agriculture purchases? Let me explain. Most of the big issues US demanding on trade can't be easily quantified, measured, or observed. How do you quantify Chinese market protectionism or that China has stopped those practices? 1/n
What can be very easily measured and most importantly observed? China imports of US goods. We know if China imports something. Why is this important? Trump administration has complained regularly and currently about China agreeing to deals and cheating the next day. 2/n
Trump administration using this plank of the deal as a means to extract a hard commitment that is effectively measuring Chinese intent to adhere to a deal. Please note all reports are that China is refusing to commit to anything. Place this in a bigger view. China really 3/n
Refusing to commit not just to agriculture purchases but really to any aspect of major issues here.I'm pretty sure if China said, we've gone over the numbers, we can do $30b or $40, here is data on your producers and our needs we will commit to that this would signal 4/n
They are serious but the key concern of Trump had been heavily on preventing cheating. How do you solve that problem? Focus on observability. So then why focus on $50b with China refusing to commit to anything much less this number? 5/n
Setting it up at $50, if China has or will agree to that, is giving Trump the easy ability to walk away from everything when China cheats on the other stuff which we know they will. I think this issue is much more about second order issues setting up the second move.
This explains why China is refusing to commit to anything and why they won't accept the $50b. They know they have no internet of living up to any deal much less $50b and don't want to be drawn into the trap laid by Trump laying the groundwork for collapse. 6/n
Where everyone sees a straight forward problem, China is backed into a corner refusing to commit to anything and definitely not $50b because they know it gives Trump an out. Not nearly the simple issue most people see. Done.
