I think I have been overly optimistic about the trajectory of US-China relations.
There are increasing signs the US-China trade deal is about to fall apart. President Trump’s tweet this morning is the latest sign:
As I have said for a long time, dealing with China is a very expensive thing to do. We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference – and all those innocent lives lost!
— Donald J. Trump (@realDonaldTrump) May 13, 2020
Axios reporter Jonathan Swan followed up a few hours later, and I have been hearing the same things:
This tweet comes amid internal discussions over whether Trump blows up the China trade deal. https://t.co/dgJHwmzPmX
— Jonathan Swan (@jonathanvswan) May 13, 2020
There is basically no way China can hit the 2020 deal target now and for Trump what matters is huge progress towards the goal by the November election day, not by end of the year. Even if there were that progress the domestic political considerations look increasingly likely to steer Trump and his advisors to jettison the deal and push harder on “blame China” for the growing COVID-19 carnage in the US.
On the Chinese side there appear to be more voices saying there is no point in trying to fulfill the deal because the US will beat on us regardless.
It is worth noting that the President used the phrase “Plague from China” in his tweet this morning. If I am not mistaken that is the first time he has used that term. US National Security Advisor Robert O’Brien used it yesterday in a press spray.
And just to add even more negative energy to the relationship, Global Times editor in chief Hu Xijin tweeted this today, and his paper has a longer piece on this topic, which you can see in item 5:
To counteract the abuse of anti-China litigation over COVID-19, Beijing is already preparing to take the necessary punishment measures against some members of the US Congress, the state of Missouri, and relevant individuals and entities, sources told Global Times
— Hu Xijin 胡锡进 (@HuXijin_GT) May 13, 2020
“The Global Times report reflects the fact that there are people who are unhappy with the current situation with regard to the Sino-US relations, but [the report] does not reflect the official position and such opinion has always existed in both countries,” said Wu Xinbo, director of the Centre for American Studies at Fudan University in Shanghai…
A Chinese government adviser, who did not wish to be identified, said that the two sessions will not have much direct bearing on the trade deal, but the language used will show how Beijing will approach future dealings with Washington.
“Whether [China] chooses to go full-on confrontation, or continue to maintain competition without decoupling, that is what we need to pay attention to,” he said…
He Weiwen, a former senior official at the Chinese consulates in New York and San Francisco, said many in Beijing are “citing the force majeure clause [in phase one]” and calling “for the US to have a more flexible adjustment of the US$200 billion procurement target amid the coronavirus-caused lockdown”.
A slump in U.S. corn prices to a decade low was a good chance for China to buy millions of tons of the grain, but the world’s second-largest consumer held back on purchases because relations between the two nations have soured, said Li Qiang, chief analyst with Shanghai JC Intelligence Co…
“China has the ability to complete the $40 billion purchases, but such purchases have to be based on a friendly atmosphere,” Li said during an industry conference held online.
Lower commodity prices due to the coronavirus pandemic may limit the value of China’s first year U.S. agricultural product purchases, “but it’s a two-year agreement,” ADM CEO Juan Luciano said during the virtual BMO Capital Markets Global Farm to Market Conference on Wednesday.