Trade

Trade Officials No Longer Pretending “Phase One” Will Be Enforced

JM Ashby
Written by JM Ashby

Throughout the negotiating process (to the extent that there even was a process) between 2018 and early 2020, Trump and his cabinet lackeys repeatedly said that any trade deal with China needed to have rigorous enforcement mechanisms.

That's fair enough, right? If we're going to have deals, we need a way to assess if our partners are following the terms of our deals. But it's nearly September and Trump regime officials are the ones who are refusing to enforce "phase one" of Trump's "biggest and greatest deal."

Gregg Doud, the Chief Agricultural Negotiator in the Office of the United States Trade Representative, the regime's top farm negotiator, appeared in front of farmers last week where he downplayed enforcement and stressed that "phase one" is a two year deal.

From Bloomberg:

In a speech at a U.S. Soybean Export Council webinar, Gregg Doud steered clear of comments on the binding nature of the phase-one trade deal, its enforcement mechanisms and the ability to re-impose tariffs. When asked about the sanctions for non-compliance, he stressed: “This is a two-year commitment,” referring to the duration of the agreement between the two countries, which was signed in mid-January and kicked off a month later.

“There’s going to continue to be a dialogue and discussion, and keep in mind this is a two-year commitment, so you are going to have to look at this over time,” he said. “Everyone wants to measure month to month to month, how we are doing there. At least from my perspective, we have to give this some time.” [...]

American farm exports to China have been running behind the pace need to reach the $36.5 billion pledged for 2020.Shipments of agricultural and related products to the Asian nation totaled $7.63 billion from January to July, Census Bureau data showed Tuesday. That’s about 23% of the target. The USDA’s forecast also cast doubt over whether the targets will be reached for in the two-year deal.

It's less "month to month" at this point now that we have six months of records that show China has imported about a quarter of what Trump promised they would. At their current pace, exports to China may not even reach the level seen in 2017 before Trump's trade war began.

It's not altogether surprising that China won't reach targets that we never realistic even before a global pandemic emerged, but even with that said the Trump regime should still be held accountable for completely abandoning their own enforcement mechanisms.

And this is entirely political. Any attempt to enforce the deal would be a sign that the deal isn't working and, as far as the Trump White House and his campaign are concerned, everything is working exactly the way it should. Things are 'great again,' they say.

Chinese officials aren't stupid. They know Trump can't enforce his own deal because of the presidential election. They must be thinking there's no reason to compromise or buy any more than they necessarily need because the Trumps sure as hell aren't going to force them.

I honestly have no idea how the Biden administration will handle "phase one" next year, but I think they should toss it out the window and start over with a path toward actually lifting all of Trump's tariffs which will still be in place as we try to recover from Trump's recession.

  • muselet

    Donald Trump’s “biggest and greatest deal” is a flop. Of course, it was never likely to be anything else (Donald Trump was involved, so it was always going to be a failure).

    I am a bit surprised the administration is soft-pedaling enforcement. Yes, as I keep saying, China can hurt the US more than the US can hurt China, and the optics of that would not be favorable to Trump. However, Trump is generally disinclined to back down from a pointless fight.

    On second thought, hand-waving away discussion of enforcement makes (very cynical) sense in the long term. Toward the end of year 2 of phase 1 of this deal, the Rs will start screeching that the Biden administration is letting China get away with noncompliance. (The surprise here is that someone could convince Trump to look more than ten minutes ahead.)

    And while we’re talking about tariffs, American households pay about $400 extra per year because of this administration’s tariffs. Thanks, Trump.

    –alopecia