Advisers to President Trump are split over the future of the U.S.-China trade deal as tensions with Beijing rise and imports of American goods to China slow.
Trump failed to disclose more details of the phase-one deal in a Friday news conference, despite claiming on Thursday that he would, and did not take questions following his remarks.
“This certainly won’t be the final say,” a source with knowledge of the discussions told the Washington Examiner about the future of the agreement. “If [China] is not living up to the deal, you can’t get to the fall and say, ‘I created the best trade deal with China.’ That talking point is out the window.”
Trump has shared his frustration over the slow start to the deal, telling Fox News that he was “very torn” on the deal, and he had “not decided” if the United States would keep to it. “It’s not like we’re thrilled,” he added.
Pushback comes from corners of the White House that negotiated China’s multibillion-dollar shopping list of U.S. energy exports, agricultural commodities, manufactured goods, services, and Capitol Hill lawmakers from states such as Iowa that typically sell goods to China.
A joint statement from U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin after a phone call with Chinese Vice Premier Liu He said both countries were optimistic China would meet the deal’s purchase commitments.
Iowa Sen. Republican Chuck Grassley talked to Trump about the terms of the deal this week, a source said, while another Iowa Republican, Sen. Joni Ernst, faces a newly competitive reelection race.
For Trump, “There’s probably a little bit of a delicate dance there,” this person added.
Former U.S. trade official James Green credited the deal’s “sticking power” to Lighthizer and Mnuchin rigor. “They spent their blood, sweat, and tears negotiating it. They have a vested interest in seeing that it has worked and it’s fulfilled,” said Green, now an adviser at McLarty Associates, a consulting firm.
“They tried hard to have agreement among the main administration principles throughout [the process of negotiation]. That reduces the chance that someone will say, ‘Hey, I was left out’ or ‘this disagreement is terrible,'” Green said.
Some are pointing to U.S. export figures from the first quarter as a measure of Beijing’s failure to meet the agreement.
China committed to buying $200 billion more American goods and services in the January deal, including somewhere close to $36 billion in agricultural products, an increase up by more than half from 2019.
Center for a Prosperous America chief economist Jeff Ferry said Beijing purchased less than half as many million tons of U.S. soybeans (11.4 million tons) than from Brazil (24.7 million tons) in the first quarter of 2020.
“I don’t think there’s a purposeful design on the part of the Chinese government to not purchase what they said they were going to purchase,” Green said of the slow start.
One further complaint, Chinese production of high-purity polysilicon, an important solar cell and semiconductor component, is set to increase pending the expansion of a major Chinese manufacturing company.
“If you have ever had doubts about the ambition of the Chinese polysilicon industry, they should have been removed now,” analyst Johannes Bernreuter said of the growth.
Beijing’s total purchasing of U.S. polysilicon has also fallen this first quarter over last.
Both soybean and polysilicon imports to China from the U.S. were expected to increase under the terms of the deal.
“Broadly speaking, I think there is a flawed process of putting these export targets out, and I think those will be unreachable but not because of ill will or bad intent,” Green said.
“That doesn’t mean that the China trade deal won’t blow up over something, or at some point, that the administration will make the political calculation that pulling away is worth more than staying in. But I do think that it makes it a little bit unusual, in the U.S.-China context, having two people who are quite dedicated to seeing that it work out.”
