Over the past two years, China bought only 57% of the American goods and services that it had committed to purchasing under the so-called phase-one agreement, which former President Donald Trump boasted was a “historical trade deal.” The total was “not even enough to reach its import levels from before the trade war,” according to a report by the Peterson Institute for International Economics (PIIE), released on Tuesday.
The deal, signed in Washington in January 2020, required Beijing to buy an additional $200 billion worth of American goods and services during 2020-21, relative to 2017 levels.
“Put differently, China bought none of the additional $200 billion of exports Trump's deal had promised,” the PIIE said.
The report pointed out that after two years of “escalating tariffs and rhetoric about economic decoupling,” the deal did little to reduce the uncertainty, discouraging the business investment needed to restart US exports. Most of Trump's tariffs remained in effect, raising costs to US companies.
The start of the Covid-19 pandemic added to the troubles, with a temporary collapse in goods trade globally.
“China was never able to catch up, as the agreement was back-loaded, with additional purchase commitments for 2021 that were more than 60% higher than 2020,” the PIIE said, adding that in 2020–21, China fell $13.6 billion short of reaching even the baseline level of purchases.
Last week, the US’ deputy trade representative, Sarah Bianchi, said the two countries were at a “difficult stage in the relationship.” She stressed that China’s state aid to companies and non-market economic policies and practices were a “serious threat to American economic interests.”
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