Phase I of the “trade deal” with China is not an impeachable offense. But President Trump, who fancies himself a master dealmaker, has once again managed to maneuver the United States out of a strong position into another unmitigated defeat. Notwithstanding all of his foreign policy outrages and blunders, including offending most of our allies, Mr. Trump was on the side of Right when he identified China as a serial cheater deserving of retribution. But the key issues on China trade have always been its theft of our intellectual property, often through limiting access to Chinese markets to foreign companies that shared their IP with their Chinese counterparts—and then sponsoring the theft of that IP. Phase I of this trade deal does nothing – nada, zilch, bupkus – to address this.
What was our key leverage on China? First, tariffs on Chinese imports. Approximately $160 billion in tariffs were scheduled to go into effect later this month. And second, although it was not widely reported, rising citizen discontent arising from food shortages, exacerbated by a pig disease (African swine fever) that has caused the price of pork to nearly double in China. Pork is a staple in China on most household tables. In the last year, nearly half of China’s hog population has died, whether from the disease or slaughter. That’s around 100 million hogs. There aren’t enough hogs in the rest of the world to satisfy Chinese needs. So China needs our pork.
With a predictable political master stroke to enhance his personal re-election chances, Trump and his courtiers (Lighthizer, Navarro, Mnuchin, and Kudlow) abandoned the fight. We have agreed to halt the scheduled imposition of additional tariffs in Phase I, lower some existing tariffs, and (we think) secured an agreement from the Chinese to buy more of our agricultural products. Sounds like a win-win? Not at all. Some U.S. farmers will be happy. But the Chinese have scored a great victory—they can continue to sell into our markets, keep their component manufacturers happy, and steal our technology while satisfying their citizenry’s need for protein. The President has also bought a few more votes in the Midwest, enhancing his reelection chances—not to mention deflecting attention in a timely fashion from the impeachment process. But on the key issues, Phase I is merely another example of the American President and his claque benefitting Trump while allowing the USA to be taken to the cleaners. We have no reason to even expect a Phase II.
What he has done is Not Impeachable, but it is incredibly damaging and boneheaded. If one considers only American interests, Mr. Trump has now moved into second place behind Neville Chamberlain in the pantheon of Great Suckers. The Dealmaker has sold us out and virtually guaranteed the Chinese will proceed in their planned march toward hegemony—in Asia and sooner than we should have expected, the world.