THE AMERCAN political class has finally come up with a bipartisan policy: denouncing China. After three years of fulmination, injurious tariffs, and costly Chinese retaliation, the Trump administration announced that China will buy more products, although no one is sure how the pledges, with Chinese caveats, will work out. Each side can rely on its own statistics. China also agreed to improve policies in a few other areas that are in its interest, although with many gaps. In return, the United States will, for at least awhile, hold off on more self-defeating taxes on imports. This package is “Phase One.” “Phase Two” is, well… to come later.
What is the result of Donald Trump’s deal-making? According to Chad Bown of the Peterson Institute for International Economics, Trump’s tariffs will still cover almost two-thirds of all U.S. imports from China, with an average rate of 19.3 percent, compared to 3.0 percent before. Most of the Chinese goods are intermediate products, so Trump’s taxes just raise costs for American producers. China’s retaliatory tariffs target almost 57 percent of U.S. exports, with an average tariff of 20.5 percent, up from 8 percent pre-Trump. China, unlike the United States, has been lowering tariffs and trade barriers with the rest of the world.
This deal pretends to be a China policy. As Evan Feigenbaum of the Carnegie Endowment first pointed out, the United States has an attitude toward China, not a policy. America has been wasting time, squandering international capital, and failing to achieve real results.