A new report by the conservative Peterson Institute for International Economics says, “China Was Never On Path to Meet ‘Phase 1’ Purchase Commitments.”
The report confirms my claim in December, 2019, that Trump offered a fake Phase One deal because he had failed in his trade war and needed a win for his campaign.
The Phase One Deal was China’s way of waiting out Trump
Trump needed something he could bill as a victory so he could get his long-faultering trade war with China off the election debate stage, and that worked out quite well for him as we heard little talk about it from others after the “No-Deal Deal” was struck and almost none at all from Trump. It also accomplished exactly what China wanted:
China … will outlast Trump [in the trade war] because it has no election to worry about; it’s used to being long-suffering; so, China’s strategy is longterm gain over short-term pain. That is what unfolded this past week as I will lay that out for you clearly below.
You see, as far back as June, 2019, I had said,
There will be no Chinese trade deal in the near future…. China will trump Trump…. The Chinese would far rather wait out Trump for a year and half than capitulate [to Trump’s trade terms] and get stuck for decades with a far worse economic situation than it has had….
Then in August, I wrote,
I cannot even imagine how anyone thought the US/China Trade War — or, as I call it, the Trump Trade War — was ever coming together. It could not possibly have “fallen out of place,” [as one article claimed] because it has never for one second been in place.… NO progress has been made at any point along the line! So, again, why would anyone think that is going to happen? There has not been one single PERMANENT thing Trump has asked for from China that has been agreed to that we know of. All we have seen are piecemeal temporary measures agreed to that have been poorly followed through. There has never been any reason to believe Trump when he has said a deal was imminent — not any reason based in hard facts.…The Chinese trade hope is a mirage.
China let Trump have a face-saving deal that they had no attention of ever honoring because it would get Trump to back off some of his sanctions and then sit quiet about Chinese trade until the election, they hoped, took him out of office and out of the way.
Thus, I declared in that December article, that Trump just wanted to get glaring failure out of sight.
With the election year about to begin, Trump needed to close this out in a hurry. As I have reiterated throughout the past year, the best we could hope for is that Trump would come out with something he could claim is a far bigger victory than it is, and that is where we wound up this past week.
The No-deal Deal
It was clear to me the deal would never be honored. One of the biggest tattle-tales, I said, was that there was no deal. There was nothing signed. It was all hot air. I quoted Rabobank on that:
We have been promised this gift many times, and each time it has turned out to be an empty box. We need to see China publicly agree, too. We need to see the text of what it is agreeing to. And we need to see it signed, sealed, and delivered….
We didn’t get to see that. Supposedly the deal, itself, promised that each side would not publicly disclose the precise details. That, I said, was so that each side, which would certainly include Trump in an election year, would be free to say whatever they wanted about how much the deal gave them:
I have to note that the deal Trump is now trumpeting about is something we are told we are not allowed to read because purportedly China has stipulated that neither side can release any part of the deal that is actually in writing. We don’t know how much is in writing and how much is just a hand-shake because we are not allowed to see the actual deal, but that probably doesn’t matter because no one has signed on to it yet anyway.
In fact, while Trump was boasting about how much China had agreed to buy from the US, China reported to its own populace that it hadn’t agreed to any specific amounts of anything, and now we know that is apparently true. It certainly hasn’t acted as if it agreed to any specific amounts, and no one is holding them accountable to any specific amounts.
The rest is here: https://thegreatrecession.info/blog/never-done-deal-w-china/