Manufacture This

The blog of the Alliance for American Manufacturing

Trump is reportedly considering a trade deal focused on increasing Chinese purchases.

President Donald Trump appears to be looking for a quick deal between the two countries, despite United States Trade Representative Robert Lighthizer’s insistence that he’ll keep fighting for the structural changes desperately needed in U.S.-China trade relations. And China’s pretty happy about it.

As The New York Times reports:

“[E]arly details indicate [the trade agreement] would do little to substantively change the way China has long done business and would not force Beijing to curtail cybertheft or the subsidies that the administration complains create an uneven playing field for American companies.

"The language aimed at China’s discrimination against foreign companies, like its antimonopoly law or standard-setting processes, is probably too vague to be enforceable, while China’s promises on curtailing subsidies are also overly broad, a person familiar with the negotiation said. The pact also doesn’t alter China’s tight restrictions on data, the person said. In addition, many of the big purchases that Beijing is promising would occur over a number of years, which could give China further leverage during that period, critics say.”

In accepting a trade deal that focuses on increasing China’s purchase of American agricultural and energy goods, the Trump administration would squander the unique leverage it has built through tariffs and widespread bipartisan support for pressure on Beijing.

As Alliance for American Manufacturing President Scott Paul wrote in RealClearPolititcs:

“The Trump administration should be seeking measurable improvements to China’s industrial policies so that those policies don’t tacitly encourage economic espionage or serve as release valves for Beijing’s intentional industrial overcapacities. It should maintain those tariffs and a strict enforcement regimen to hold China’s attention.”

Trump has already decided to abandon the scheduled March 1 tariff increase and has not announced plans for another. But, there’s still time for him to hold China accountable for its trade cheating.  

Just last week, Lighthizer and White House Economic Adviser Larry Kudlow were both asked to forecast the results of a U.S.-China trade agreement and offered conflicting reports. Kudlow promised an imminent “historic” deal while Lighthizer suggested that “much still need[s] to be done” to achieve the substantive changes required to level the U.S.-China playing field.

Should Lighthizer’s focus on achieving real progress win out, these reports of a weak U.S.-China trade deal for Trump to pass off as a win will hopefully dissipate and the Trump trade team can get down to business once again.