Trade

Trump’s Trade Promises Slip Further Out of Sight

JM Ashby
Written by JM Ashby

Customs data from earlier this year showed that China had only purchased about 20 percent of the amount of total goods that Trump promised they would under "phase one" of his "biggest and greatest deal," but the situation has not improved much.

While China had purchased about 20 percent of the yearly target by June, they had only purchased about 32 percent as of September.

From Bloomberg:

China reduced the pace of its purchases of U.S. goods in August, making slow progress in meeting the goals of its trade deal with the world’s biggest economy.

The value of U.S. goods bought by China declined from the previous month, led by a slowdown in energy products, according to Bloomberg calculations based on Customs Administration data. By the end of August, China had purchased about 32.8% of the full-year target of more than $170 billion -- meaning it must buy about $115 billion of goods in the remaining four months of the year to comply with the agreement signed in January.

Will China buy $115 bill or nearly 70 percent of the total in just four months? I suppose it's possible, but so far they've only purchased 32 percent over eight months.

China's low amount of purchases earlier in the year was expected to some degree because the coronavirus pandemic had reduced global demand by the greatest amount in the spring, but that's no longer as much of a valid excuse.

China was never going to purchase as much as Trump promised in any case and even if the pandemic never existed, but Trump has more recently poked his finger in China's face; first by increasing sanctions on Chinese-owned telecommunications company Huawei and then by imposing sanctions on China's largest semiconductor manufacturer.

The only reason China is purchasing anything from us at this point is because they need it to meet domestic demand, not because they're eager to fulfill Trump's promise. Exports of soybeans used to make animal feed surged by almost 300 percent in August, for example, but exports of pork plummeted by 40 percent because China is rebuilding their own herd of hogs that was wiped out by disease last year.

The issue of foreign policy and relations with China will almost certainly come up at tonight's presidential debate. Trump will undoubtedly make big boasts while Biden points out that Trump's policy has led to one failure after another.

  • muselet

    “Trade wars are good, and easy to win.” –Donald Trump, March 2, 2018

    China was always unlikely to meet Donald Trump’s unrealistic trade goals, in large part because they were never China’s trade goals (I get the feeling the Chinese government let Trump have his “biggest and greatest deal” the same way an adult will let a small child win a board game). Like any other nation, China will import what it needs to import and export what it wants to export.

    My fearless prediction: every time someone mentions China during the presidential debates, even in the context of international trade, Trump will launch into his trademark whinge about China deliberately unleashing “the China virus” on the world and won’t stop until he’s recited all his talking points.

    –alopecia