A large part of the phase one trade deal between China and the United States that entered into force almost one year ago was a “failure”, according to a new report, although “several elements are worth keeping and building upon,” reported the South China Morning Post.
As part of the deal, China committed to buying $200 billion in additional goods and services over 2020-21 on top of 2017’s levels. But a report released by the Peterson Institute for International Economics on Monday, US exports of phase one goods to China in 2020 fell more than 40% of the target.
“The Biden administration plans to review the phase one trade agreement president Donald Trump forged with China in late 2019. Good. Much of the deal was a failure,” wrote economist Chad Bown in the report, which was based on full-year analysis of US trade data released last Friday.
“According to evidence from the deal’s first year, China was never on pace to meet that commitment, with the economic devastation of the Covid-19 pandemic only partly to blame. Attempting to manage trade – to meet Trump’s objective of reducing the bilateral trade deficit – was self-defeating from the start. It did not help that neither China nor the United States was willing to de-escalate their debilitating tariff war.”