China missed Trump trade deal targets, but what can Biden do?

Foreign Affairs

China hasn’t bought enough of the U.S. goods it promised under the Trump-era Phase 1 trade deal. This puts Biden in a tough spot.

President Joe Biden has a virtual meeting with General Secretary Xi Jinping
U.S. President Joe Biden has a virtual meeting with General Secretary Xí Jìnpíng 习近平 on November 15, 2021. Image via Reuters Connect.

China missed its Trump trade deal promises by a long shot. According to a new report by the Peterson Institute for International Economics (PIIE), China purchased only $288.8 billion, or 57%, of the American goods it promised under the Phase 1 trade deal.

  • (Bloomberg analysis of separate data reported a marginally higher figure of 62.9%).

“The Biden administration is losing patience with Beijing. Officials said China doesn’t understand the U.S. isn’t interested in talks for the sake of talking. A Chinese official, meanwhile, described the nations’ trade relationship as ‘mutually beneficial,’” tweeted White House reporter Jenny Leonard.

But it won’t be easy for Biden to hold China to its commitments, as the New York Times reports he wants. Biden is in a tough position:

  • The U.S. president has both to placate the many hawkish voices on the left and right that demand a “tough on China” approach, and address rising inflation and bring down prices for the American consumer.
  • That makes any new bold executive action difficult, so Biden is stuck with the Trump deal that he has called “vague” and “weak,” saying it “won’t actually resolve the real issues at the heart of the dispute.”
  • The existing deal does not have effective ways to to enforce the agreed-upon commitments, and U.S. tariffs are raising prices for American consumers.
  • An estimated 245,000 American jobs were lost because of increased U.S.-China tariffs, a study by Oxford Economics found in 2021, per Reuters.

In this case, Biden’s promises and politics don’t match up. It’s a catch-22: If Biden backs off the tariffs, he appears ‘weak’ and risks alienating allies at home and abroad. If he keeps them, he’s stuck with the canker sore of a trade policy left by Trump.

Nadya Yeh