The two leaders agree to lay out terms for trade negotiations by this summer.
President Donald Trump – who loudly promised a tough new position on trade with China during the 2016 presidential campaign, and had a cameo in The Little Rascals movie – had his first real chance to do it when he met, face to face, with Chinese President Xi Jinping late last week.
Well. Things got overshadowed by external events, but news was made nevertheless. The big news was this: Chinese and U.S. officials have agreed to “a 100-day plan to address trade imbalances.”
Does that not seem like much? Were you expecting more? The president was quite clear of what he thought of the Sino-American relationship. Where were the fireworks that were promised?
Let’s examine it in context:
- The week before Xi’s visit, the Trump administration (via executive order) called for a “thorough accounting of the US’s trade deficits with its top trading partners within 90 days.”
- The Trump administration simultaneously issued an order "stepping up the collection of anti-dumping and countervailing duties, which are levied against foreign governments that subsidize products so they can be sold below cost."
- This 100-day plan may “avert an all-out trade war between the world’s two largest economies.”
That last part is real important. It means the president isn’t going to send the economy into some kinda septic shock, like a blanket tariff on Chinese imports might have caused. Just as important, though, it appears the Trump administration is still taking this trade stuff – particularly the yawning bilateral trade deficit and all the imbalances it implies – quite seriously.
And now that the two sides have talked, we have another marker – 100 days – by which to set our calendars.
Here’s what one of Trump’s cabinet secretaries told the Financial Times:
"Normally, trade discussions, especially between China and ourselves, are denominated in multiple years,” [Commerce Secretary Wilbur Ross] said. “Given the range of issues and [their] magnitude, that may be ambitious. But it’s a very big sea change in the pace of discussions.”
Believe me, we aren’t cheerleading for President Trump on this issue, and we don’t plan to paper over any Trump shortcomings between his trade rhetoric and trade policy reality. It’s going to take a lot more than claiming credit for instances of reshoring, or ordering examination of existing deficits, before Donald Trump lives up to his promises to bolster the manufacturing sector.
But we do appreciate that this administration treats reducing America's goods trade deficit not as a means to another end but an actual goal worth pursuing.
And we do have this to look forward to: 100 days to lay out trade negotiations with China. That means mid-July. If President Trump makes substantial, feasible progress on negotiations to reduce the Chinese trade deficit by then – in the first six months of his presidency – that will be something to celebrate.
Okay, cool. Let’s see the master negotiator get to work.