Having assessed data on US exports and China’s imports for the 1st half 2020, economists made a conclusion that for nearly six months China was breaching the terms of the Phase 1 trade deal. From January through June, China purchased goods and commodities way under the volume set out in the trade deal settled by US President Donald Trump and his Chinese counterpart.
Amazingly, China has been frequently caught telling lies at different levels of the state hierarchy. The ministry of foreign affairs and other top officials tend to say distorted facts in public. The official statistics bureau releases fake economic metrics. The West blames Beijing for covering up the truth about the coronavirus outbreak. Now the breach of the trade agreement from China’s side has come to light. Importantly, Donald Trump took a lot of effort to revise trade relations with Beijing and increase its exports to China. Eventually, the Phase 1 trade deal was finalized in January 2020. Xi Jinping assured the US leader of his interest in mutually beneficial trade relations. In practice, China ditched its commitments from the very beginning. Following the good old tradition, China’s customs authorities provided sugar-coated records on US imports. According to the Commerce Department, the US exported goods worth $33.1 billion for the first six months of the year out of $142.7 billion for the whole 2020. However, China’s customs administration reported on imports worth $40.2 billion out of the total $172.7 billion. The deal binds China to purchase mainly capital goods, agricultural produce, and energy commodities.
To sum up, the US-China phase one trade agreement raises lots of questions. In the meantime, the US and China are holding a six-month review of the deal. With the focus on trade, the deal also sets out conditions for cooperation in technology and finance. Phase 1 deal will be replaced with Phase 2 agreement. The trade war will be over provided that all conditions are met in full.
