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Trump’s Trade Deal With China is Way Underperforming Promises

Summary:
Remember the Phase One trade deal between the US & China? Let's check in with the Peterson Institute for International Economics PIIE US-China Phase One Tracker to see how Trump's trade deal is going.Phase One Imports and Exports The Tracker shows that as of March 2020, China’s purchases of all covered products were around 40-46% of their year-to-date targets.Note the huge difference between what China says it is importing vs what the US says it is exporting.AgricultureChina Imports: .1 BillionUS Exports: .1 BillionManufactured GoodsChina Imports: .6 BillionUS Exports: .9 BillionEnergyChina Imports: %excerpt%.1 BillionUS Exports: %excerpt%.4 BillionUncoveredChina Imports: .7 BillionUS Exports: .6 BillionTwo Sets of Numbers China says it imported .5 Billion.The US says it exported .0

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Remember the Phase One trade deal between the US & China? 

Let's check in with the Peterson Institute for International Economics PIIE US-China Phase One Tracker to see how Trump's trade deal is going.

Phase One Imports and Exports 

Trump's Trade Deal With China is Way Underperforming Promises

The Tracker shows that as of March 2020, China’s purchases of all covered products were around 40-46% of their year-to-date targets.

Note the huge difference between what China says it is importing vs what the US says it is exporting.

Agriculture

  • China Imports: $5.1 Billion
  • US Exports: $3.1 Billion

Manufactured Goods

  • China Imports: $14.6 Billion
  • US Exports: $10.9 Billion

Energy

  • China Imports: $0.1 Billion
  • US Exports: $0.4 Billion

Uncovered

  • China Imports: $7.7 Billion
  • US Exports: $7.6 Billion

Two Sets of Numbers

  • China says it imported $27.5 Billion.
  • The US says it exported $22.0 Billion

Agreement Methodology

The agreement’s Chapter 6, Article 6.2.6 states Official Chinese trade data and official US trade data shall be used to determine whether this Chapter has been implemented.” One implication is that there are two sets of monthly data to track (Chinese imports and US exports). A second is that there are two different annual, and hence monthly, targets, since the 2017 baseline level of Chinese imports differs from the 2017 baseline level of US exports. 

The amazing Trump trade team negotiated those fine stipulations.

Bear in mind that the March numbers are before Covid-19 significantly hit the US, but had already hit China hard.

Trump Tariffs Disrupted Critical Coronavirus Supplies

In addition to the failure of Phase One, please note Tariffs Disrupted Medical Supplies Critical to US Coronavirus Fight.

The US-China trade war has forced US buyers to reduce purchases of medical supplies from China and seek alternative sources. US imports of Chinese medical products covered by the Trump administration’s 25 percent tariffs dropped by 16 percent in 2019 compared with two years earlier. 

Trump's Trade Deal With China is Way Underperforming Promises

It feels so unfair on the rest of the world for Trump to have all this winning.

Can’t we spread it around a bit?

Mish

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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