Trade data for the month of June was released by the Department of Commerce yesterday, so we now have a full six months of results of the “Phase 1” trade deal with China. As I predicted when the deal was signed in January, the deal is a total failure.
You may have heard stories in the news, as I did, about how the Chinese were beginning to make progress on catching up to the goals established by this deal. I had my doubts, so I was anxious to see the real data. Here it is, year-to-date through June: Phase 1 China Trade Deal 2020 YTD.
The deal established goals for the Chinese import of American goods in four categories, using 2017 trade results as a baseline: manufactured goods, energy goods (like oil, gas, coal, etc.), agriculture goods, and total goods. The goal was for them to increase their imports substantially in 2020, and then even more in 2021. In the spreadsheet, I broke down those goals into monthly goals, ramping them up at a rate that would meet those goals by the end of the year.
Through May, the results were abysmal. They failed to meet the goal in any category of product. In fact, only their import of energy products even exceeded the 2017 baseline. You’d think that if China were anxious to meet the goals in order to avoid further threatened tariffs, they’d at least make some good faith effort that they could point to as progress. So what happened in June? Their imports actually declined in every category. They didn’t even meet the 2017 baseline in a single category.
A good faith effort to show progress? The June results are exactly the opposite. They are a slap in the face. The Chinese are taunting the Trump administration – betting that they’ll be too distracted with other events to take action.
It’s time to put an end to this stupid trade deal and follow through with the threatened 25% across-the-board tariffs on all Chinese exports to the U.S. Trump was elected, in large part, to make real progress in cutting America’s trade deficit and bringing manufacturing back to the U.S. Aside from tariffs on half of Chinese exports and a new trade deal to replace NAFTA, little has been accomplished. All momentum on the trade front was killed when Trump signed the “Phase 1” deal with China. Three-and-a-half years have been frittered away. His supporters are getting disillusioned by the lack of progress. If Trump loses the election, it will be due in large part to his failure to fix our trade mess.
There’s no more time to waste. It’s time to declare this deal a failure and impose the tariffs that were put on hold. In addition, it’s time for Trump to get serious with other Asian nations and the European Union as well. Slap all of them with tariffs and start making real progress in bringing our manufacturing jobs back.