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China Falls Woefully Short Of Commitments To Purchase US Goods Amid Biden Lack Of Enforcement

Tyler Durden's Photo
by Tyler Durden
Wednesday, Feb 09, 2022 - 02:45 AM

Trade data released on Tuesday morning shows a massive shortfall in China's 'Phase 1' purchases pertaining to 2020 trade deal promises inked under Trump, to meet a certain volume on American energy, soybeans, airplanes, and services, among other things. It suggests any claims of Biden's 'toughness' on China notwithstanding, the reality appears that Beijing is seeing through the US administration's supposed "firmness" on holding China to account. 

Reuters observes of the numbers: "The data showed China missed by far its commitments to purchase an additional $200 billion worth of U.S. farm and manufactured goods, energy and services above 2017 levels - the year before a bitter trade war embroiled the world's two largest economies."

Source: Associated Press

Chinese leaders appear to be citing as the prime factor in the shortfall the extraordinary circumstances of the pandemic, arguing that a specific clause in the trade deal necessitates consultations between the two governments "in the event that a natural disaster or other unforeseeable event outside the control of the Parties delays a Party from timely complying with its obligations."

According to a breakdown of the numbers reviewed in The New York Times China didn't come anywhere close to what it pledged:

In order to reach those targets, China would have needed to purchase at least $227.9 billion of U.S. exports in 2020 and $274.5 billion in 2021, for a total of $502.4 billion over the two years, said Chad Bown, a senior fellow at the Peterson Institute for International Economics.

But China did not come close, Mr. Bown said in an analysis of the trade data published Tuesday, buying only $288.8 billion, or 57 percent, of the American exports it promised.

At the same time, a separate NY Times report detailed that "The U.S. trade deficit in goods soared to record levels in 2021, topping $1 trillion as Americans continued to spend heavily on computers, toys, bicycles, clothing, pharmaceuticals and other goods made in foreign factories during the pandemic."

In an illuminating and blunt assessment given to Reuters by former USTR chief of staff Jamieson Greer, who was deeply involved in negotiating the Phase 1 deal, the admin still has the legal ability to pursue "retrospective enforcement for what's been missed," according to language embedded in the agreement.

"It's in the interest of the administration to pursue enforcement," Greer underscored. But he emphasized: "With a few kind of narrow exceptions, we haven't really seen that much enforcement" on trade matters from the Biden administration, he concluded according to Reuters. Meanwhile, US officials are much belatedly demanding "concrete action" from China, which is likely only to continue shrugging off the feeble Biden admin demands. 

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