The U.S.-China Trade Deal is Getting Worse All the Time. It’s Time for a New Strategy.

Washington, D.C. – Saturday marks the second anniversary of the signing of the U.S.-China “Phase 1” trade agreement. Since the deal was signed by former President Donald Trump two years ago, China’s government has failed to meet even its basic purchasing obligations, let alone address any of its most egregious trade practices.

Alliance for American Manufacturing President Scott Paul said:

“After two years of a U.S.-China trade deal that overpromised and underdelivered, it’s time for a fresh start — and a new strategy.

“The United States must now pivot from the transactional to the transformational. Continuing to focus on the unfulfilled commodity purchases in the Phase 1 deal is not how we will strengthen America’s national and economic security. It won’t create good jobs, either. 

“Instead, the Biden administration and Congress must move forward on several fronts that will position the United States to win the competition of the 21st century, as the president himself likes to say.

“First, we must invest in our own industrial capabilities and reshore critical supply chains. Investments in infrastructure, clean energy, and advanced technology programs that have been enacted or proposed are a good start.

“Second, our trade enforcement strategy must broaden. Now is not the time to remove tariffs on imports from China; they are not the cause of the episodic inflation we see today. Rather, we must sharpen and deploy new tools to defend against China’s unfair trade practices such as industrial subsidies, state ownership, overcapacity in key sectors, labor exploitation, non-enforcement of environmental regulations, and currency misalignment.  

“Third, we must enlist our allies in these efforts, including in Europe, North America, and Asia. We can be stronger and more effective working together, but our allies must also do more to address China’s rampant trade cheating.

“Finally, we must be clear-eyed about Beijing’s intentions. Just as the notion that more trade would lead to more civil liberties in China has been decisively debunked, the idea that we should go easy on the CCP to gain climate goal cooperation is complete and utter nonsense.

“I believe transforming the U.S.-China relationship has broad, bipartisan support. We see evidence of that with the recently passed Uyghur Forced Labor Prevention Act, the Senate-passed United States Innovation and Competition Act, and the continuation of the Section 301 tariffs through multiple presidential administrations. Now it’s time to enact a robust, forward-thinking policy response that will allow the United States not only to compete against China on the global stage, but to win.” 

Scott Paul wrote to then-President Trump two years ago to explain why the Phase 1 deal was “completely inadequate and leaves much work to be done.” You can find the full text of that letter here.