Trade

Review of Trump’s ‘Greatest Deal Ever’ Canceled

SK Ashby
Written by SK Ashby

Chinese and American trade officials were suppose to hold a meeting over the weekend to review the current status of "phase one" of Trump's "biggest and greatest deal," but the review was canceled at the very last minute.

But we already know what the current status is and it's not good.

Although Trump regime officials speak confidently in public, you might say that's the very reason they canceled the review; they know it's not working.

From CNBC:

No new date for the initial six-month compliance review between U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He has been agreed, the sources said. [...]

Another source familiar with the plans said that U.S. officials wanted more time to allow China to increase purchases of U.S. goods agreed in the deal, to improve the political optics of the review.

China’s imports of U.S. farm and manufactured goods, energy and services are well behind the pace needed to meet a first-year target increase of $77 billion over 2017 purchases.

In hindsight, it makes perfect sense that they would cancel the review and it should have been anticipated.

Trump's top economic adviser Larry Kudlow said the trade deal is "fine" on Thursday and Trump himself said the deal was "doing very well" on Friday. Conducting a review of the deal would expose their rhetoric for the fantasy that it is so why would they want to do that?

I would not surprised if there is no review before the election unless Trump believes another escalation would be to his political advantage. The Trump White House has repeatedly said China has to live up to their commitments, but there's currently no mechanism in place that would compel them to. There's not even a rhetorical effort to increase pressure on China because the narrative of Trump's campaign is that everything is Great Again if not better than ever.

With China having purchased only about a quarter of what they were supposedly going to purchase under Trump's deal, it's hard to see the situation changing by a substantial amount in the two and a half months remaining until the election.