The Art of the Deal
Trump’s China Trade Deal: Much Ado About Nothing?

The Trump Administration announced its first round of successful trade deals with China on Friday, unveiling a 10-point package to renegotiate the parameters of an economic relationship Trump has long denounced as skewed and unfair. The NYT has the overview:

Under the newly announced deals, China set a deadline for fulfilling its promises to allow American beef and said it would speed up consideration of pending American applications to offer bioengineered seeds in China. It will also allow foreign-owned firms to provide credit-rating services in China, publish guidelines to let American firms offer electronic payment services there, and issue licenses to two American financial institutions to underwrite bonds. […]

The trade deal announced Thursday will also allow Chinese companies to export cooked poultry products and offered reassurance to China that it could buy liquefied natural gas from America.

The trade agreements did not address areas such as steel, aluminum or auto parts — areas where Chinese exports have a deep, industrywide impact.

The President himself was quick to tout the announcement as proof that his hardball negotiating tactics were delivering tangible results. “China just agreed that the U.S. will be allowed to sell beef, and other major products, into China once again,” Trump tweeted. “This is REAL news!”

Dig into the details, however, and the package looks rather shallow. The agreement on U.S. beef imports, for instance, merely added a deadline to an agreement already reached under the Obama administration. And the Chinese “opening” to U.S. payment processors like MasterCard and Visa likewise appeared to be symbolic, since Beijing reserved the right to issue restrictive licensing guidelines for foreign competitors. Meanwhile, China’s protected steel and aluminum industries went unmentioned, and Beijing earned a commitment to U.S. representation at Xi Jinping’s high-profile One Belt, One Road Summit this weekend.

This seems to be part and parcel of Beijing’s approach to Trump: as the Washington Post reported in March, Xi Jinping’s trade strategy was to present Trump with “tweetable promises he could present as victories.” And a version of that logic has also applied to North Korea, with the Chinese seeking to appease Trump with low-cost moves like the coal ban that he is eager to claim credit for.

Of course, it is still early days, so tougher and more substantive rounds of deal-making could happen down the road. But for now, the Chinese seem to be calculating they can get away with modest trade concessions maximized for political impact—and so far the Trump Administration appears to be proving them right.

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