Photo credit: SupChina illustration by Derek Zheng. As we wrote yesterday, the U.S. and China appear to be about to sign a deal that satisfies no one.
The trade deal to be signed this week will include pledges by China to buy $200 billion of US goods over two years in four industries, a Trump administration official and two other sources briefed on the matter said.
The target for manufactured goods purchases will be the largest, worth around $75 billion. China will also promise to buy $50 billion worth of energy, $40 billion in agriculture and $35 billion to $40 billion in services, the three people said.
The exact timelines and details of all these purchases and the significance of any other parts of the agreement are unclear at this point. Reuters also has a report with some slightly different numbers.
The full text of the agreement is expected to be made public after it is signed. On Sunday, U.S. Treasury Secretary Steven Mnuchin insisted that China’s commitments were “not changed” during the translation process, though Adams Lee and Dan Harris at the China Law Blog have their doubts:
There is though a very significant possibility the Chinese version will not be entirely consistent with the U.S. English version and the Chinese will think they have agreed to something different from what President Trump and his team believe they have agreed to.
The Trump Administration’s cavalier attitude that the Chinese translation of what is reported to be an 86-page English version of the deal is just a minor technical matter is a bit shocking…
Of the hundreds of dual language contracts proposed by Chinese companies and reviewed by our China attorneys, we’ve never seen a single one where the Chinese portion was less favorable to the Chinese company than the English portion. But we’ve seen plenty where the Chinese language portion is better or much better for the Chinese company than the English portion.
Not making clear which language is controlling in the deal, or not making absolutely sure that the functional meanings of all parts of the text are the same in each language, would be an extraordinarily amateurish error by the Trump team members — but I wouldn’t put it past them. Previous, more competent American administrations have made important translation errors in agreements with China in the past. See Neil Thomas’s piece from March 2019 in the Washington Post: When it comes to negotiating with China, the devil is in the details.
More techno-trade-war-related news:
“The ‘phase one’ deal offers little relief for countless American businesses — including chemical makers, apparel retailers and auto parts manufacturers — that will still face the same punishing tariffs they have confronted for some time,” the Washington Post reports.
Trump’s supporters are sold. “Anything we can do to equalize trade with China is a good thing,” one auto worker in the Midwest told the New York Times (porous paywall), echoing other supporters and advisers of the Trump 2020 reelection campaign who appear prepared to accept the expected Chinese purchases as a win and move on.
A new report from the Rhodium Group explores “US-China Venture Capital in a New Era of Strategic Competition.” The report covers the period from 2000 to 2019.
“In December, [China’s] dollar-denominated exports rose 7.6 percent on-year, against a 1.3 percent drop in November. December imports were 16.3 percent higher than a year ago,” CNBC reports. Both import and export trade numbers surpassed the expectations of economists.
China’s currency today “touched its highest since July in the offshore market, after punching through 6.9 per dollar for the first time in more than five months on Monday. The latest leg up came from news of the Trump administration removing China from its designation as a currency manipulator,” according to Bloomberg (porous paywall).