The US and China have agreed on a trade deal.
But they seem to understand their “deal” in conflicting ways.
And the ideological differences run deep.
Welcome back to China Uncensored.
I’m Chris Chappell.
This episode has been sponsored by Surfshark.
Because when you surf the web,
you should be using a VPN to protect your identity.
America’s trade war with China continues.
But President Trump announced this month both countries
have agreed on at least a temporary trade deal.
As Trump wrote on his favorite platform,
“The deal I just made with China is, by far,
the greatest and biggest deal ever made
for our Great Patriot Farmers in the history of our Country.
In fact, there is a question as to whether or not
this much product can be produced?
Our farmers will figure it out.
Thank you China!”
Now I know what you’re thinking:
“Wow!
That sounds like the greatest and biggest deal
ever made in the history of our country!”
So here’s what this great deal actually says...
Um, wait, it doesn’t say anything.
Shelley, why are these notes blank?
What’s that?
Nothing was actually written down.
Apparently, what happened is that on October 11,
President Trump met with China’s Vice Premier Liu He.
Then Trump announced they had made
“Phase One” of a trade deal.
But it was more of a handshake deal
than a written-down sort of deal.
And like many handshake deals,
each side remembers it a little differently.
From Trump’s perspective,
“China will buy as much as $50 billion in U.S. agricultural goods
in exchange for the suspension of additional tariffs.”
Specifically, Trump has delayed the tariff increase
that was originally going to go into effect on October 15—
on $250 billion dollars of Chinese goods.
But Trump has not reduced any existing tariffs
or stopped future tariffs.
But from China’s perspective coming out of that handshake,
they still want more talks,
and would need *existing* tariffs rolled back
in order to reach that 50 billion worth of agricultural imports.
And instead of this month’s handshake
being phase one of the trade deal,
China’s Vice Premier said the meeting merely
“laid an important foundation for a phase one agreement.”
So where does that leave the US and China?
It’s like Star Wars: The Last Jedi.
It’s still unresolved,
and overall you’re just left feeling disappointed.
And will Rey and Kylo Ren fall in love
or forever remain mortal enemies?
Well, you won’t have to wait much longer to find out.
In both cases.
As for the trade deal,
we may get the next episode as soon as mid-November.
That’s when President Trump and Chinese leader Xi Jinping
will meet at the APEC forum in Chile.
Presumably after another one of those
super awkward world-leader family photos.
Everyone loves those.
Especially Putin.
So if Trump and Xi still need to meet in November
to make the phase one deal,
does that mean that October’s meeting was a wash?
This is what US Commerce Secretary Wilbur Ross told FOX News.
“I think we’re in a better place.
And remember, for a while, there was no talk.
It was broken off.
Now they’re back at the table.
Clearly they want to make a deal.
We would like to make a deal.
But from our point of view,
it has to be the right deal.
And it doesn’t have to be in November.
It’s more critical that it be a proper deal
than exactly when it occurs.”
So what would a “proper deal” involve?
Well, phase one—the written kind,
not just the handshake kind—
could reduce upcoming US tariffs,
in exchange for China’s promise
to buy those American agricultural goods.
That’s important to Trump,
because making American farmers happy
makes it easier for him to win the 2020 presidential election.
And China, for its part, wants to have a deal, too.
US tariffs over the last year-plus
have hurt the Chinese economy pretty hard.
Last quarter, China’s official statistics
reported the lowest GDP growth in 27 years.
Of course, everyone knows that they fudge the GDP numbers,
but the fact that they let the *official* number go that low
is a sign of a weakening economy.
And a weak economy threatens Xi Jinping’s grip on power.
So that, along with Trump seeking re-election,
means both sides want a phase one deal
and the political brownie points that follow.
But a phase one deal like this
won’t solve the fundamental trade problem.
The Chinese regime has been cheating on trade
for two decades—
from intellectual property theft,
to forced technology transfers,
to illegal subsidies.
And they continue to cheat.
A final trade deal would need to resolve all these things.
Maybe that’s phase two.
Maybe that’s phase seven.
Maybe that’s phase never.
But whenever it happens,
it can’t just be a pinky-swear promise.
“The most important is enforcement.
Because their record hasn’t been that great on enforcement,
so we need to have a real enforcement mechanism.”
“‘Not great’ is like an understatement, right?
I mean the Chinese break promises all over town.
They break promises with the WTO.
They broke promises with the US.
How are you going to get that enforcement in there,
and get the Chinese to follow it?”
“Well if they don’t,
we really don’t have much of an arrangement.”
No, you really don’t.
Which is why even if Trump and Xi sign something in November,
it won’t actually end the longstanding trade tensions
between the US and China.
Those tensions come down to more than
just trade and enforcement of WTO rules.
There are deep ideological differences
between the US government,
and the Chinese Communist Party.
The Chinese Communist Party insists on
controlling all private enterprise.
This article in the state-run People’s Daily last week
says that private companies
must strengthen the work of Party-building.
It says that nearly 1.6 million private companies inside China
already have Communist Party branches within their structures,
and the rest should follow their example.
That’s exactly the opposite of what the US wants.
The US wants private companies to be, in fact, private,
and not controlled by the whims of the Communist Party.
Unless, of course,
it means the Communist Party can force private companies
to buy $50 billion dollars in US agricultural products.
But let’s conveniently ignore that little irony.
And anyway, the ideological differences run deeper.
Because the US and China are competing for geopolitical power—
a.k.a. world domination.
China pledges billions of dollars to Africa...
The US pledges billions of dollars to Africa.
China pushes its companies
to dominate 5G wireless communications...
The US pushes its own companies to dominate 5G.
China wants to build an airport in Greenland...
The US wants to...buy Greenland.
So it’s unclear if any trade deal
can really solve these deep differences.
And no matter what gets signed in November,
it can only be phase one of a much bigger battle.
And this episode has been sponsored by Surfshark.
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Once again, I’m Chris Chappell.
See you next time.