The US and China have a trade deal, but only Washington has what it wants

December 23, 2019

Editor’s note: Just three years ago, the conventional wisdom was that the US could do nothing about China’s behavior or its inevitable rise to become the biggest world economy. The conventional wisdom has changed for the better.

US President Trump has been super proud of the accord, while Beijing’s response has been notably muted. But the trade talks have always been a one-way avenue – a deal between what the US wants and what China can give

[Cary Huang | December 21, 2019 | SCMP]

The different approaches adopted by American and Chinese officials in dealing with the long-awaited first trade deal reflect their different sentiments and views on the result of the marathon deliberations.

US President Donald Trump has been super proud of the accord, praising it as “a big deal”, “an amazing deal”, and “a historic deal”. In sharp contrast, Beijing has maintained a rarely seen cautious attitude, with its often superlatively upbeat state media muted and shying away from commenting on the development. The only positive word used in China’s official statement is “significant”.
In news briefings, United States officials gave detailed information and specific numbers about the accord, trying to give the impression that the deal is “measurable, enforceable and verifiable”. Chinese officials, by comparison, released just the outlines of agreement in nine areas without giving any specifics. The fact that Beijing has released fewer details about the deal than Washington might speak volumes.

The downgraded signing ceremony for the “significant” deal might be more evidence of differing views over the significance of the accord. The deal will not be signed by both presidents as planned, but instead by their lead negotiators – US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, a change that is likely to have been a Chinese suggestion.

From the beginning, the US-China trade talks have been a one-way avenue as they are all about a deal between what the US wants and what China can give.
Trump initiated the tariff war with the aim of forcing China to overhaul its state-dominated system and market-unfriendly policy, and to change what the US claimed were unfair trade practices.
The nine areas outlined in the 86-page document China released are largely about how it has to make changes – in other words, the accord is a must-do list for Beijing. In the tariff war, Washington apparently has the upper hand as the US has imported much more from China than vice versa. Thus Washington slapped tariffs on US$550 billion worth of Chinese products, while Beijing, in turn, lashed back at US$185 billion worth of American products – with the sum of both figures equivalent to about the entire trade volume between the two countries.

Indeed, Trump has succeeded in doing more than any of his predecessors in addressing the trade deficit, as China has pledged to go on a purchasing spree of US products. The trade deficit has been the No 1 issue in long-lasting US-China trade tensions, one that successive administrations have failed to tackle.

It would be a big political victory for Trump himself as the “massive purchases” of agricultural produce from the US will be a big boost to his re-election campaign.

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