BNN BLOOMBERG
When the trade deal between China and the U.S. was signed in January 2020, there was some hope that it would lead to a reduction in bilateral tensions and restore some balance to trade, but those goals are proving elusive as 2021 comes to a close.
In the 23 months since then-President Donald Trump signed the phase-one agreement, Chinese imports from the U.S. have indeed hit a new record. However, as of the end of last month Beijing was well behind on promises made — buying little more than 59% of the extra $200 billion in manufactured, agricultural and energy goods it said it would by the end of 2021.
The increase in imports was overwhelmed by the pandemic-induced surge in exports going the other way, undermining the attempt to secure more balanced trade between the world’s two biggest economies. That puts China on track for a record trade surplus with the U.S. this year — selling $358 billion more in goods than it bought in the first 11 months of this year.
Critics of Trump’s deal said its terms, especially the purchase promises, were unrealistic from the start. Disruptions to global commerce from the Covid-19 pandemic have exacerbated the situation. In addition, punitive tariffs imposed by both sides are still in place, making hundreds of billions of dollars’ worth of goods more expensive.
Read more: China’s Response to U.S. Trade Talks Shows Gap Between Two
Former U.S. Ambassador to China Gary Locke this week said that “unless there’s a signal, a clear change of behavior — commitments by the People’s Republic of China on these tough economics and trade policies — I think it would be very hard for the Biden administration to reduce or eliminate those tariffs.”
Both sides have said that they are continuing to discuss the trade deal, with U.S. Trade Representative Katherine Tai in October saying that the administration would talk directly to China to enforce what was agreed. However, there was no mention of trade after the nations’ leaders spoke last month. And with no new agreement, it is unclear what will happen in the new year with Chinese purchases of products like soybeans, airplanes or natural gas.
