At least Trump didn’t ban all Chinese students — trade war, day 89

Newsletter

Within the past 10 days, U.S.-China relations have been shaken, repeatedly and violently. As we have noted repeatedly in recent weeks, the trade war is just one part of a growing confrontation between the two countries. It is tough to keep track, as it is all happening so fast, but it is hard not to describe this as a downward spiral:

  • The amount of tariffs more than tripled on September 24 (Access paywall), and tentative trade talks were scorched.
  • China accused the U.S. of “trade bullyism” in an extensive government white paper, and said it refuses to negotiate while the U.S. holds a “knife to the throat.”
  • Trump accused China of election interference, but provided no evidence of a covert campaign.
  • Trump said he “may not be” friends with Xí Jìnpíng 习近平 anymore — although the Chinese leader never said they were friends in the first place.
  • China canceled a diplomatic and security dialogue with the U.S., likely due to a variety of factors, as we wrote on Access yesterday (paywall).

Today brings two big stories, of a further bump to U.S.-China relations, and a previously unreported way in which the relationship was nearly totally derailed earlier this year:

Back to trade, the U.S. just signed a rebranded North American Free Trade Agreement, and it takes aim at China. SCMP reports:

A special clause in the new US-Mexico-Canada trade agreement would give Washington a near-veto over any attempt by Canada or Mexico to agree to a free-trade deal with a ‘non-market economy’, in what analysts have said is a major threat to China’s position in the global trading system.

Meanwhile, Patrick Chovanec, the managing director of Silvercrest Asset Management and a longtime China watcher, writes on Twitter that the worst impacts of tariffs are yet to come, but coming soon:

The broader China tariffs that affect either consumer goods, or goods of any kind that don’t have a ready replacement, are only just now starting to come into effect…
I think the gap between extremely assertive tariff rhetoric or much slowing tariff implementation (so far) has lulled us into a false sense of complacency about the potential impact of tariffs on the US economy.

More trade war and U.S.-China relations news:


Previously in SupChina’s trade war coverage:

Trump official Matt Pottinger quotes Confucius, in Chinese, to make point about language and truth