The U.S. and China have reached a deal on trade. Treasury Secretary Mnuchin said this about the deal:
Right now, we have agreed to put tariffs on hold while we try to execute the framework.
We are immediately going to follow this up with . . . hard commitments in agriculture, where we expect to see a very big increase — 35-40 percent increases — in agriculture this year alone. In energy, doubling the energy purchases. I think you could see $50, 60 billion a year of energy purchases over the next three to five years.
We have specific targets. I’m not going to publicly disclose what they are.
It’s easy to see what has happened. The Trump administration has backed down on imposing tariffs on Chinese products in the hope of getting China to buy more American products.
There are two problems. First, the tariffs weren’t, or shouldn’t have been, primarily about getting China to buy more American stuff. They were, or should have been, directed at ending predatory Chinese practices that enable China to steal American technology as part of its plan to gain dominance in the technology sector.
What does the deal with China accomplish on this front? According to the joint statement of the U.S. and Chinese governments:
Both sides attach paramount importance to intellectual property protections, and agreed to strengthen cooperation. China will advance relevant amendments to its laws and regulations in this area, including the Patent Law.
In other words, China has agreed to nothing.
Second, China hasn’t agreed to much even on the straight trade side. There is a “framework” that Mnuchin will “try to execute.” He wants to “follow up” with “hard commitments.” In other words, no hard commitments have been made. We “could see” $50 or $60 billion a year of energy purchases by the Chinese along with 35-40 percent increases in agricultural purchases. But the Chinese haven’t committed to this.
Once again, the can has been kicked down the road. I agree with Rich Lowry:
The vague-to-the-point-of-useless deal and complete absence of American action could have been pulled straight from the Obama or Bush administrations. Secretary Mnuchin is perfectly imitating former Treasury secretaries Lew, Geithner, and Paulson, who led us here.
I understand why Trump, like his predecessors, doesn’t want a trade war with China. Contrary to his absurd pronouncement, trade wars aren’t easy to win — not against powers like China. Still, it’s disheartening to see Trump fold this way.