In classic form, Trump concluded his hollow trade deal with Xi Jinping Thursday, and then changed the subject and the headlines. With no clear plan or rationale, he announced that the U.S. could resume nuclear testing. And, of course, the Asia trip itself was planned as a diversion from the government shutdown. Trump’s method is to drive us to distraction.
A close examination of the agreement with Xi suggests that Trump got rolled; or more precisely, he rolled himself. Coherence and preparation matters. Xi and his advisers had plenty of it. Trump had mainly his own impulsivity.
The latest sequence began when China denied the U.S. access to rare earth minerals whose production China dominates, as a response to earlier U.S. tariff increases. Then in early October, Trump raised tariffs on China’s exports to 100 percent. Both of these were rolled back in the deal.
Next, Trump tossed soybeans into the mix. U.S. soybean farmers are outraged because of loss of export markets to Argentina and Brazil, as a by-product of Trump’s other policies. China as part of this week’s deal offered to buy more U.S. soybeans. But China made a similar pledge as part of a 2020 “Phase One” trade deal and its actual purchases fell short.
In that deal, China committed to buy 142 million tons over two years. In the current deal, China agreed to far less, only 25 million tons a year over the next three years. A similar on-again, off-again pattern has affected China’s commitments to work to halt fentanyl production. But Trump made specific cuts to Chinese tariffs in exchange for pledges on these matters.
To the extent that the deal provides “relief,” it’s relief from the pain Trump imposed on the economy himself. But to anyone serious about the China challenge, these issues are a sideshow. The larger issues of China’s growing dominance of a whole range of advanced technologies via predatory mercantilist industrial policies were untouched in these negotiations.
More alarmingly, despite protestations that national-security issues would never be sacrificed in trade negotiations, Trump did exactly that. As part of the deal, Trump agreed to a one-year pause on export controls that increased the number of Chinese companies barred from access to advanced technology. The rule, issued just four weeks ago, expanded the so-called “entity list” of blacklisted foreign companies that pose a national-security threat.
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