U.S. Fails to Enforce “Phase 1” China Trade Deal

https://www.fidelity.com/news/article/top-news/202008242045RTRSNEWSCOMBINED_KBN25L023-OUSBS_1

As reported in the above-linked article, with six months of results from the “Phase 1” trade deal with China now in, the U.S. has “rolled over” for China yet again, ignoring the Chinese snub of the deal.  The picture that accompanies the article, showing the flag of Red China flying above that of the U.S., is appropriate.  Red China dominates the U.S. in trade because it dominates the U.S. in terms of its willingness to stand up for itself.

In spite of the fact that China has not made one inch of progress toward meeting the goals of the deal – in fact, it’s not even measuring up to the 2017 baseline for purchasing American goods – the U.S. Trade Representative’s office had this to say following a phone discussion with Chinese trade leaders:

“Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,”

Red China has won again.  It’s tactic of making trade deals and then completely ignoring them, knowing that the U.S. never follows through on anything, has worked again, just as it has for decades.  The Chinese are once again rolling in the aisles with laughter.

Is Trump on board with this?  Is this a move calculated to avoid roiling the markets just ahead of the election?  Is he saving a tough response, like imposing the new tariffs that this deal delayed, until just ahead of the election, calculating that it will win him votes before anyone even takes notice of a market decline?

I don’t know, but I do know that the lack of progress in cutting the trade deficit and bringing back American manufacturing jobs is a major reason behind the decline in enthusiasm for his re-election.  Revitalizing the manufacturing sector of the economy is the key ingredient needed to “Make America Great Again” and it’s difficult to see any progress at all on that front.

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