President Trump signed ‘phase one of an anticipated two-part deal Wednesday signaling a possible end to a trade war and 18 months of bilateral head-butting between the world’s two most dominant economic powerhouses.
The president said the U.S. and China are “writing the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families.” He said the deal has “total and full enforceability,” although skeptics are expressing doubts.
China is expected to make billions of dollars’ worth of agricultural purchases and begin reforming its longstanding practice of forced technology transfer.
A U.S. Trade Representative Fact Sheet said the deal includes a “dramatic expansion of U.S. food, agriculture and seafood product exports” as well as an agreement by China to end its long-standing practice of forcing or pressuring foreign companies to transfer their technologies to Chinese companies,
The deal also reiterates U.S. opposition to currency manipulation and codifies China’s commitment to buy at least $200 billion in U.S. exports over two years including manufactured goods, food, agricultural, energy products and services.
The White House expects Beijing to buy about $80 billion in manufactured goods, $53 billion in energy, $32 billion in agriculture and $35 billion in services.
Throughout the Obama presidency, Democrats were content to play second fiddle to China, arguing that not much could be done to save US jobs and industries.
Outsourcing and globalization were the new way forward and Americans had to accept this grim reality. The world was moving toward globalization and American labor would be forced to compete with Third World workers enduring slavery-like conditions and miniscule wages.
While the Midwest was bleeding jobs and unemployed workers were languishing in despair, clinging to opioids to cope, Democrats kept reassuring the country that new jobs would open up, particularly green jobs. It was an economic philosophy of passivity, letting the world sweep the country along in whatever direction the economic tide was flowing.
The US experienced very tepid economic growth during this era while China was averaging 6% growth in GDP per year.
Trump has been wrestling with the US Chamber of Commerce and members of his own party to push a more muscular policy, bringing back manufacturing jobs to the US and penalizing trading partners like China and Mexico with tariffs, to the chagrin of many economists. They said Trump would drive the US economy off a cliff. It was just a matter of time.
South Carolina Republican Sen. Lindsey Graham said last year that U.S. consumers would have to be willing to feel some pain in order to make China finally end its unfair trading practices.
“I’m glad American companies are in China doing business because there’s a lot of customers. What I don’t like is they close off markets to the American business community in China,” Graham said last year on CBS’s “Face the Nation.”
“They’re required to have a Chinese business partner when you do business in China, and they steal all of your stuff.”
“How do you get China to change without creating some pain on them and us? I don’t know,” he said.
He commended the president for labeling China a currency manipulator, something former Presidents George Bush and Barack Obama were reluctant to do. Graham also said Americans have to be ready to tighten their belts in order to make China’s government change its trade practices.
The Trump administration expects to begin negotiations on phase two of the trade agreement before the November 2020 election.