1 / 10
Trump's heralded trade deal with China rests on a $200 bn assumption:
China will increase purchases of US exports by $200 bn over 2020-21.
But a look at
The agreement's LEGAL text
+ DATA
+ ECONOMICS
___
= this is highly UNLIKELY.
My latest
piie.com/blogs/trade-an…
Trump's heralded trade deal with China rests on a $200 bn assumption:
China will increase purchases of US exports by $200 bn over 2020-21.
But a look at
The agreement's LEGAL text
+ DATA
+ ECONOMICS
___
= this is highly UNLIKELY.
My latest
piie.com/blogs/trade-an…
2/10
Why? LOTS of contributing reasons:
The deal’s start is TODAY, not some “2017 baseline.” Trump’s trade war means US exports to China are now $20 bn per year LOWER than 2017.
The deal demands Beijing increase purchases by *$240 bn* – not $200 bn – over TWO short years...
Why? LOTS of contributing reasons:
The deal’s start is TODAY, not some “2017 baseline.” Trump’s trade war means US exports to China are now $20 bn per year LOWER than 2017.
The deal demands Beijing increase purchases by *$240 bn* – not $200 bn – over TWO short years...
3/10
Decomposing Chinese import commitments BY SECTOR – agriculture, manufacturing, energy, services — reveals why achieving the growth target is so DIFFICULT:
• China’s slowing economic growth
• pre-2017 slowing US export trends
Decomposing Chinese import commitments BY SECTOR – agriculture, manufacturing, energy, services — reveals why achieving the growth target is so DIFFICULT:
• China’s slowing economic growth
• pre-2017 slowing US export trends
4/10
This matters. With unrealistic export targets, the US-China deal may be doomed from the start.
Other benefits of ACTUAL Chinese commitments in the agreement could be put in peril.
Trade tensions could resume...
This matters. With unrealistic export targets, the US-China deal may be doomed from the start.
Other benefits of ACTUAL Chinese commitments in the agreement could be put in peril.
Trade tensions could resume...
5/10
Also, in response to US pressure in the US-China deal, Beijing could divert imports away from other foreign sources to try to meet some US targets
Those countries, and the trading system, will suffer...
Also, in response to US pressure in the US-China deal, Beijing could divert imports away from other foreign sources to try to meet some US targets
Those countries, and the trading system, will suffer...
6/10
The US-China agreement may test MANY countries’ exports to China, several of which are traditional US allies.
This undermines their willingness to work together on OTHER key issues, including the US-EU-Japan initiative on Chinese subsidies...
The US-China agreement may test MANY countries’ exports to China, several of which are traditional US allies.
This undermines their willingness to work together on OTHER key issues, including the US-EU-Japan initiative on Chinese subsidies...
7/10
Five more forces at work against Trump’s export targets:
1. Lingering uncertainty created by Trump’s policy
2. New US export controls
3. Trump’s tariffs on $360 bn remain and slow future Chinese growth
4. Severed trade ties due to Trade War
5. African swine fever
Five more forces at work against Trump’s export targets:
1. Lingering uncertainty created by Trump’s policy
2. New US export controls
3. Trump’s tariffs on $360 bn remain and slow future Chinese growth
4. Severed trade ties due to Trade War
5. African swine fever
8/10
The incompleteness of Trump’s trade management — even in THIS deal — means other US companies and workers could be hurt
• $51.6 bn (23%) of US exports to China are NOT legally covered by the managed trade
• China is NOT on the legal hook for trade in these products
The incompleteness of Trump’s trade management — even in THIS deal — means other US companies and workers could be hurt
• $51.6 bn (23%) of US exports to China are NOT legally covered by the managed trade
• China is NOT on the legal hook for trade in these products
9/10
Unrealistic export targets may imperil not only trade peace but also the trade progress required to tackle the legitimate concerns in the US-China relationship.
Unrealistic export targets may imperil not only trade peace but also the trade progress required to tackle the legitimate concerns in the US-China relationship.
10/10
For more on OTHER elements of the legal commitments in the US-China agreement, check out the latest episode of my @Trade__Talks podcast
With @SoumayaKeynes, @DarciVetter, and more…
tradetalkspodcast.com/podcast/118-in…
For more on OTHER elements of the legal commitments in the US-China agreement, check out the latest episode of my @Trade__Talks podcast
With @SoumayaKeynes, @DarciVetter, and more…
tradetalkspodcast.com/podcast/118-in…
