Will Trump Sink Structural Changes in Exchange for Soybeans?

Cathalijne Adams

Cathalijne Adams Writer/Researcher, AAM

Ahead of Chinese Vice-Premier Liu He’s return to Washington, D.C. for yet another round of U.S.-China trade talks, China’s priming the pump for a potential deal. Yet, Beijing hasn’t shown signs of true compromise when it comes to the objectives as the heart of the talks: stymying China’s abuse of state subsidy programs for industry, intellectual property rights and forced technology transfers.

This Monday China announced it would finally ban production and export of fentanyl-related substances, which have fueled an epidemic of addiction in the U.S. – an action long overdue. Additionally, China purchased 828,000 tons of U.S. soybeans this week – its second soybean purchase since the start of U.S.-China trade negotiations. All of this is good but fails to address any of the systemic problems that have unfairly advantaged China in trade.

As Alliance for American Manufacturing President Scott Paul illuminated in a RealClearPolitics opinion, prioritizing Chinese purchases of U.S. commodities like soybeans and natural gas over structural changes would sacrifice the leverage the U.S. trade team has cultivated for the sake of a quick, easy solution.

Indeed, boosting U.S. exports to China may have disastrous consequences in leaving U.S. industry increasingly dependent on China as The New York Times recently reported and American semiconductor companies warned against.

China’s attempt at luring the Trump administration into believing its recent actions signal willingness to conclude trade negotiations while refusing to advance to a market-oriented economy should all come to naught if U.S. Trade Representative Robert Lighthizer continues to steer the course of negotiations. Lighthizer has repeatedly attested that he refuses to settle for anything but a deal that truly addresses China’s unfair trade practices.  

No rest for the weary…

With a packed trade agenda, Lighthizer is tackling not only the gargantuan task of overhauling U.S.-China trade relations but also Congressional ratification of the United States-Mexico-Canada Agreement (USMCA) this week. On Tuesday, he met with freshman House Democratsas part of the effort to win support from their party, which has contended that the deal’s enforcement of labor and environmental standards require further strengthening.

However, that same day, Speaker Nancy Pelosi told POLITICO Playbook that Congress would not ratify the USMCA until Mexico passed legislation protecting workers’ rights. (Concerns over Mexican labor reform are also a sticking point for AFL-CIO President Richard Trumka.)

Lighthizer may have a long way to go before a U.S.-China trade deal is settled and the USMCA is ratified, but with time both ventures hold promise for resolution.   


Reposted from AAM