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President Donald Trump made a bold statement on Fox News, suggesting that his trade deal with China might have prevented the country from disintegrating. This commentary came earlier this month during an interview with Bret Baier.
The arrangement, unveiled on May 12, saw both the United States and China agreeing to reduce their respective tariff rates by 1.15 percentage points for a duration of 90 days. However, analysts frequently classify this deal as a victory for China. The lowering of American tariffs paves the way for China to boost its sales to the U.S. market, which constitutes over one-third of global consumer expenditures. Conversely, the reduction in tariffs imposed by China does little to facilitate the entry of American goods into the Chinese market.
One significant impediment for American exports to China remains the non-tariff barriers that China has enforced. The recently announced pause does not address these longstanding obstacles, which were enacted prior to what Trump termed ‘Liberation Day’.
Alan Tonelson, a notable American trade expert, expressed his views, stating, ‘China came out on top. No question, we got the short end of the stick.’
Trump’s trade policies, often labeled as a ‘tariff war’ by the Chinese government, surfaced during a critical period for the Communist Party. Despite official reports indicating a GDP growth rate of 5.4% in the first quarter from China’s National Bureau of Statistics, prevailing economic conditions suggest contraction, as reflected by deflationary trends emerging in price data from February to April.
The tariffs enacted under Trump’s administration severely impacted China’s struggling export sector, leading to factory closures and public demonstrations from unpaid workers. In his remarks to Baier, Trump alluded to the hardships facing the Chinese regime, suggesting that it could have collapsed under sustained high tariffs.
This temporary pause in tariff enforcement grants the Chinese regime a critical reprieve. As a result, Chinese factories can ramp up production and shipment of products to America during a crucial time—specifically, the Christmas season, which begins around June.
The interaction between the U.S. and China’s Communist Party has a history of intervention from American presidents. Three leaders have extended their hands to salvage communism in China over the years.
Richard Nixon’s visit to Beijing in 1972 was pivotal. It marked a significant moment near the conclusion of Mao Zedong’s Cultural Revolution, which had left the regime vulnerable. His visit was perceived as a signal of American support for the Communist leadership.
Similarly, George H. W. Bush’s actions in 1989 provided a lifeline to Deng Xiaoping following the brutal suppression of protests in Tiananmen Square. This support came during a period of national upheaval that threatened the survival of the regime.
Furthermore, Bill Clinton’s trade agreement in 1999 occurred during a low point as China struggled to recover from the Asian Financial Crisis. This arrangement facilitated China’s rapid and somewhat premature accession to the World Trade Organization.
The historical context reveals that previous administrations, while leading a dominant America, believed that engaging with Chinese leaders would generate reciprocal cooperation. However, those assumptions about China’s future trajectory have proven fundamentally flawed.
As Charles Burton from the Sinopsis think tank observed, the initial hopes for China’s cooperation have given way to a reality where the Communist Party has adopted a more hostile and dangerous stance as it grew in power.
This month, Xi Jinping’s actions have underscored the inability to foster cooperation with a regime known for its hostility. China recently failed to meet its commitment to remove numerous non-tariff barriers that the U.S. had hoped would be eliminated by the end of the negotiated 90 days. These barriers include rare earth export regulations that remain a contentious issue.
Moreover, the Chinese Communist Party, via the semi-official Global Times tabloid, indicated that it had no intentions of lifting other non-monetary restrictions that the U.S. anticipated would be dropped.
The situation further escalated when, on May 18, the Chinese government imposed a significant anti-dumping duty of 74.9% on American-made POM copolymers. This move is seen as an aggressive response to Trump’s concessions.
Experts argue that China’s approach to trade negotiations reflects a pattern of duplicity. Charles Burton labeled this behavior as ‘blatantly dishonest’, highlighting a trend of bad faith bargaining typical of the Communist Party.
In light of these developments, analysts like Tonelson believe Trump made a critical mistake by easing pressures on China at this juncture. Trump had previously held significant leverage which he seemingly relinquished, allowing China to regain an offensive position.
As the situation evolves, the question arises: what actions should President Trump consider moving forward?
Burton advises that Trump’s immediate course should involve distancing the U.S. from China’s deceitful dealings. He noted that previous attempts to rescue communist regimes have consistently ended in failure.
The path ahead remains unclear, but the historical and economic implications of this trade deal will undoubtedly resonate as tensions between the two nations continue.
