Photo credit: SupChina illustration by Derek Zheng
“We must bear in mind that the trade war is not over yet — the U.S. hasn’t revoked all its tariffs on China and China is still implementing its retaliatory measures. There are still many uncertainties down the road.”
That is the view from Beijing, as told by Taoran Notes (in Chinese), a WeChat blog “affiliated with the official Economic Daily newspaper that is used by Beijing to manage trade talk expectations,” the South China Morning Post reports.
“The U.S. hasn’t revoked all its tariffs on China” is a vast understatement. According to calculations by Chad Brown at the Peterson Institute of International Economics, the “phase one” trade deal that is expected to be signed in Washington, D.C., this Wednesday will reduce Trump’s tariffs by less than 2 percent — from 21 percent to 19.3 percent.
“The deal isn’t what either side said it had wanted,” the Wall Street Journal summarizes (paywall). “The U.S. doesn’t get the fundamental reforms in Chinese economic policy it sought to help American businesses. And levies remain on about $370 billion of China’s exports.”
Back to the status quo we go
Trump is preparing to rebrand a preexisting part of U.S. foreign policy and call it a win, even though it changes little in substance, a separate report in the WSJ suggests (paywall). The upcoming trade pact will establish “at least bi-annual meetings,” tentatively called the Comprehensive Economic Dialogue — essentially just a new name for what was called the Strategic and Economic Dialogue in the Obama administration. If this pattern of rebranding sounds familiar, that’s because it’s exactly what happened with NAFTA.
Another piece of the status quo that is being restored: The Trump administration has agreed to revoke its designation of China as a “currency manipulator,” which was made largely as an act of political symbolism last August.