War. What is it good for?
Treasury Secretary Steve Mnuchin appeared on Fox News yesterday morning where he was the first member of the Trump regime to announce that Trump's budding trade war with China has been canceled for now.
“We’re putting the trade war on hold,” Mr. Mnuchin said on “Fox News Sunday.”
The reprieve came as many crucial details remained undecided, and trade experts warned that the suspension of tariffs could undercut Mr. Trump’s leverage and thrust the United States back into the kind of lengthy — and ultimately fruitless — negotiations with China that have bogged down previous administrations. [...]
“[Trump] could always decide to put the tariffs back on if China doesn’t go through with their commitments,” Mr. Mnuchin said.
It will be difficult for China to "go through with their commitments" because China hasn't actually made any commitments that we know of.
The Associated Press reports that while China has said it will purchase more American goods, they have not agreed to a target number.
After high-level talks Thursday and Friday in Washington, Beijing agreed in a joint statement with the U.S. to “substantially reduce” America’s trade deficit with China, but did not commit to cut the gap by any specific amount. The Trump administration had sought to slash the deficit by $200 billion.
Still, Mnuchin said the two countries had made “meaningful progress” and that the administration has agreed to put on hold proposed tariffs on up to $150 billion in Chinese products.
Trump tweeted this morning that China has agreed buy as much as American farmers can produce...
Under our potential deal with China, they will purchase from our Great American Farmers practically as much as our Farmers can produce.
— Donald J. Trump (@realDonaldTrump) May 21, 2018
...but that was already the case before Trump launched his failed trade war. China was already the top export market for a number of American crops from soybeans to sorghum.
At the end of the day, China cannot commit to reducing our trade deficit by a specific amount because that's not the way the global economy works. China could purchase every single soybean or ear of corn grown by American farmers and it would still be dwarfed by the American economy's appetite for electronics, toys, and apparel. We will always import far more than we export.
Our trade deficit with China will probably continue to set new records during the remaining quarters of the current fiscal year but the second and third quarters could be especially bad as China has already retaliated against American agriculture by canceling future orders for certain crops.