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Trump's G20 Deal With Xi Jinping Promises De-escalation of Trade War but Lacks Many Specifics

Saturday's deal seems to be a strategic retreat by the Trump administration.

CHINE NOUVELLE/SIPA/NewscomCHINE NOUVELLE/SIPA/NewscomWhen you're in a hole, the first thing to do is stop digging.

That's probably the best takeaway from the trade agreement between the United States and China that was announced Saturday at the G20 conference in Buenos Aires. The main outcome of the deal between presidents Donald Trump and Xi Jinping is that the United States won't escalate the trade war on January 1, the date when tariffs on billions of dollars of Chinese imports were set to increase to 25 percent from 10 percent. Instead, those tariffs will remain in place but at the current, lower rate.

That's surely good news, and it's the first indication since the U.S.–China trade war began in July that the two countries both want to reach a truce.

Still, describing this as an agreement—or even, indeed, as a truce—is probably giving it too much credit. Trump and Xi have agreed to avoid further escalation, but there is nothing in the read-outs provided by each nation that indicates a move towards reducing the current tariffs that have caused significant economic pain by raising prices for American manufacturers and by reducing American markets for Chinese exporters.

Take, for example, what the White House is holding up as a major part of the deal: that China "will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product[s] from the United States to reduce the trade imbalance between our two countries."

That's vague and rather unenforceable language. It also shows that Trump continues to be fixed on the so-called "trade deficit"—which has increased since his Chinese tariffs were imposed in July and sits at a record $300 billion over the first nine months of the year. It's unlikely that a one-time boost in purchasing American exports will change that, and it's not at all clear that China will be able to pressure domestic businesses into making those purchases while the tariffs it erected against American farm products are still in place.

For a look at what else the two sides have agreed to, check out this handy side-by-side from Bloomberg reporter Peter Martin.

The lack of specificity is not limited to the promise that China will purchase more agricultural goods. Throughout the entire "agreement," about the only quantifiable detail is the promise that America will go ahead and increase tariffs from 10 percent to 25 percent in 90 days if a better deal is not reached. But as trade lawyer and Cato Institute scholar Scott Lincicome points out, "with no joint statement and list of actual/concrete deliverables, how will both sides (and the public) measure success or failure in 90 days?"

The White House wants this agreement to be seen as a first step towards a real trade deal—and as evidence that its tariffs are bringing China to the negotiating table. But the details here suggest that Saturday's deal is a strategic retreat by the Trump administration. Trump gets a small political win and China gets to delay further escalation of the trade war by making vague promises about trying to buy more American farm goods. That's exactly what China wants, because time is on its side. As the costs of the trade war continue to pile up for American businesses—and if the recent stock market wobbles turn into something worse—Xi will be in a stronger bargaining position relative to Trump, who will face mounting political pressure to abandon the tariffs if there aren't solid results to show for them.

Delaying those 25 percent tariffs on Chinese imports will help American businesses and consumers, but it's too soon to determine if that delay brings us closer to the end of the trade war or if we're merely entering a temporary lull in hostilities.

Photo Credit: CHINE NOUVELLE/SIPA/Newscom

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  • Don't look at me!||

    Ancient Chinese secret.

  • Chipper Morning Baculum||

    Caption that photo:

    Trump thought bubble: 'Why....is...my...hand...stuck!?!?'
    Xi Jinping thought bubble: "Cóng nà guàn fēngmì zhōng chī wán hòu wǒ wàngle xǐshǒu!!!'
    (Translation: 'I forgot to wash my hand after eating from that jar of honey!!')

  • Bender B. Rodriguez||

    Huh?

  • Fist of Etiquette||

    When you're in a hole, the first thing to do is stop digging.

    No, no. Dig up, stupid.

  • loveconstitution1789||

    Trump wins.

    Thanks to aggressive trade negotiations, Canada and Mexico cracked. The EU cracked. Finally the last major holdout, China, cracked.

    I am sure that Reason staff will continue to say that trade negotiation tactics (tariffs) cannot successfully be used to lower trade restrictions overall.

  • Ken Shultz||

    I oppose Trump on his trade policy. The enormous benefit of cheap goods flowing into the U.S. from China is too much to risk for pretty much any reason--other than self-defense during wartime. I oppose playing risky games with trade policy--even if Trump gambled and won. If we stupidly bet our life savings on a single hand of blackjack, that doesn't suddenly become a smart thing to do in retrospect because we won.

    On the other hand, because betting the farm on a single hand of blackjack is stupid, that doesn't mean I hope we lose either. It is possible to win, and on behalf of myself, my fellow Americans, and the red, white, and blue, I hope we do win--over my objections. And after we win, I hope no American president ever does such a stupid thing again. But just because I don't like what President Trump did, doesn't mean I hope he loses.

    Rather, I hope I'm wrong. Just like I wanted to be wrong about the Iraq War, I hope President Trump is wildly successful--and proves me wrong.

  • loveconstitution1789||

    If the Trump gamble pays off good enough, no US President would ever have to do again.

    I doubt we will get to free trade, since that was rejected by our trading partners after Trump offered it.

    It would be a mistake for our trading partners and potential trading partners to think that the USA would never try a renegotiate a batter trade deal.

    That's like businesses never renegotiating contracts to get better terms when the contract comes up for renewal. Business is not run like that.

  • a ab abc abcd abcde abcdef ahf||

    If the Trump gamble pays off good enough, no US President would ever have to do again.

    What one President does, another can, and will, undo.

  • loveconstitution1789||

    The Senate ratifies treaties dum-dum.

  • a ab abc abcd abcde abcdef ahf||

    Did you read your own writing? "If the Trump gambit..." and "US President...". You think no other President can do the same as Trump? How much of the Constitution have you actually read?

  • loveconstitution1789||

    Poor trolls. They spend so much time on their comments, just to be ignored.

    Ask Hihn how upset that makes him.

  • a ab abc abcd abcde abcdef ahf||

    Being ignored by ... you responding?

  • loveconstitution1789||

    Poor trolls don't even know when they are being talked over and not responded to.

    Its a tell of their poor grasp of American English.

  • loveconstitution1789||

    It requires one more step than a Pen and Cell Phone.

  • Bubba Jones||

    This

  • DiegoF||

    The conventional wisdom from everyone seems to be that, at least with respect to China, Trump is serious about protectionism. He believes in its economic premises; he believes that the business of the Federal government should be to actively promote American business in its policies; and he believes that China is an economic enemy that is being "unfair" and should rightly be punished, and crushed, in a show of the economic flag.

    Of course all of that is exactly what you want everyone to believe if you are playing the trade war game with China. Crazy bastard, he really believes it all! So far it is flawless in terms of making everyone think that he is serious. (Whether or not he is, he certainly wants everyone to think he is.) The press, the public, all of industry, etc. You sound like a "15-D underwater chess" foil hat if you conjecture otherwise. And I'd agree with that!

    One very significant disadvantage, of course, of making everyone think you're nuts is that you don't inspire confidence from industry in future business conditions. And you're going to see that in the economy. I think Trump figures he has enough time to take that hit. He's probably right.

  • loveconstitution1789||

    Trump will never get credit for using the media TDS hysteria to help him without them wanting to help him.

    The weakest part of Trump's strategy was convincing China that Trump was unstoppable in his trade policy mission. The media clearly has convinced Chinese leaders that Trump does not give a fuck and they should cave before Hitler makes it worse for the Chinese.

    Goes to show what information sources many countries use to form policy. They clearly use propaganda from the US media.

  • buybuydandavis||

    "What could go wrong with making the US dependent on Emperor for Life Xi?"

  • sarcasmic||

    The USMCA is worse than NAFTA, and it's hardly true free trade by your definition. By your definition USMCA is a trade war because it still contains tariffs. It's a trade deal, not free trade. You should be freaking out and demanding punishing tariffs against Canada and Mexico instead of praising your Lord and Savior in the White House. Try some intellectual consistency for once.

  • loveconstitution1789||

    Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the "worseness" for us?

  • a ab abc abcd abcde abcdef ahf||

    No, we've already done that. USMCA is worse.

    More content controls.

    Higher tariffs.

    Intrusive minimum wage and environmental controls.

    Why don't you show us where USMCA is better?

  • loveconstitution1789||

    Your link fell off.

    Propaganda does not work here troll.

  • a ab abc abcd abcde abcdef ahf||

    What, you don't even know what's in USMCA? Someone has to point it out to you?

    Yes, I do need you to follow through and "link the rules of NAFTA and USCMA so you can compare and contrast the "worseness" for us".

    Please, do so. Show us the error of our ways. Citation promised, now deliver.

  • loveconstitution1789||

    Figures, troll. You wont do work to support your position.

  • THCorCBDthatistheQuestion||

    loveconstitution1789|12.3.18 @ 10:20AM|#

    Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the "worseness" for us?
    ----------------

    If you had a handy link to a chart comparing them I would also appreciate seeing it.

    Thanks!

  • loveconstitution1789||

    Switch back to your other sock and discuss both policies.

    I am not doing your work for you.

  • a ab abc abcd abcde abcdef ahf||

    You asked if we wanted you to provide links. Carry on!

  • loveconstitution1789||

    MAGA!

  • sarcasmic||

    It's been discussed ad nauseum. NAFTA was better according to everyone except Trump sycophants like you.

    And the USMCA is not true free trade. Tariffs still exist. That makes it a trade war according to you. Why are you praising a deal that is a trade war? I thought you settled for nothing less than true free trade. Justify that or admit you're a dishonest troll.

  • loveconstitution1789||

    No it has not liar.

    Reason cherry picks. You have never compared and contrasted NAFTA vs USCMA. Ever.

    You're even worse than usual.

    Just go back to begging your Liver to give you more time.

  • sarcasmic||

    It's not true free trade. You said many, many times that you only support true free trade. You mocked trade agreements and not being true free trade. Yet you can't praise the USMCA enough. Why? Becuase Trump Trump Trump! And because you're a liar. And a troll. And an intellectually dishonest loser.

  • loveconstitution1789||

    Misquotes. Lies. Ignorance of trade policy and strategies.

    Sarcasmic at your service!

  • a ab abc abcd abcde abcdef ahf||

    Follow through on providing linkage, nope! -- That's lc1789 for ya.

  • sarcasmic||

    So you're not going to justify your insistence that the existence of any tariffs at all equal trade war, your mockery of trade agreements as not being free trade, that you will only accept zero tariffs on both sides because that is true free trade, and that you heart USMCA even though it is unacceptable and worthy of mockery by your own definitions.

    Instead you're going to insist that I dig out comments where you said those exact things, and then you'll deny or call me names.

    I expected nothing less.

  • loveconstitution1789||

    Got Sarcasmic collecting too much spittle in the corner of his mouth.

    He needs his lunch break to wipe the foam off and rally his sockpuppets.

    He still wont compare and contrast NAFTA and USCMA though.

  • Mcgoo95||

    "He still wont compare and contrast NAFTA and USCMA though."

    Umm...pretty sure it was you who promised to do that. Let me check.....yep, you were supposed to provide the link that compared them. Stupid little Ruskie Troll doesn't even know how to do his job.

  • Ken Shultz||

    Not everyone's objective was freer trade. Trump's NAFTA gambit is about gaming the system to favor U.S. labor at the expense of workers in Canada and Mexico--and at the expense of U.S. consumers.

    To the extent that I favor Trump's revisions, it's only because I fear that the alternative is the total destruction of NAFTA with no replacement at all.

    Not everyone is as sanguine on free trade as my fellow libertarians, and, unfortunately, they vote, too. Expecting to get a libertarian free trade from non-libertarians is like expecting . . . I dunno . . . an immaculate conception?

    That we got NAFTA in the first place certainly seems like a miracle.

  • Ken Shultz||

    Just for the record, Trump gave notice that he was withdrawing from NAFTA the other day.

    It's unclear whether he can do that without Congress' approval, but it's just a way to pressure Congress to pass his revisions.

    The alternative to revising NAFTA is not NAFTA--as Trump would have it. The alternative to NAFTA is nothing.

  • loveconstitution1789||

    NAFTA codified US Law
    It would appear that NAFTA is codified into US law. So Trump can possibly give notice of withdrawing from NAFTA, as per NAFTA rules, but Congress would likely have to repeal the applicable US laws.

    A Democrat Congress would likely fight Trump and this and we would end up with NAFTA sitting on the books but not enforced since a new trade treaty would be in effect.

  • loveconstitution1789||

    While I agree with you about Trump's probably end game, he did offer free trade. That was rejected by our trading partners. He probably did know that they would reject the offer anyway, so he gained the upper hand by being able to offer it without having to actually get the Senate to ratify it.

    I think Trump's negotiations taking less than 6 months to crack The EU, Mexico, Canada, and China clearly shows that getting NAFTA was not a miracle.

    The USA is such an awesome market that countries quickly cave to demands for lowering trade restrictions when they have a tougher time reaching that market. NAFTA could have been better as evidenced by all the rules that it does have. Maybe NAFTA was the best the USA could get at the time. Who knows. We do know that Trump is able to get China, Canada, Mexico, and the EU to go from refusing to negotiate at all to giving Trump and the USA quite a few concessions.

    But to some people, Trump's results are 100% random. Not well planned strategies that partially worked.

  • a ab abc abcd abcde abcdef ahf||

    Trump could drop tariffs unilaterally to zero as easily as he could boost them. That he doesn't shows he (and you and the other Trumpistas) would rather abridge individual liberty to showcase his power than actually drop tariffs to zero. That you (and Trumpistas in general) pretend this is in support of theoretical zero tariffs in a theoretical far future shows your economic illiteracy.

  • buybuydandavis||

    He could drop *our* tariffs to zero, not those of our trading partners.

    He said he was for *reciprocal* zero tariffs, not unilateral zero tariffs.

  • loveconstitution1789||

    MAGA!

  • gclancy51||

    Dum dum constitution strikes again!

  • a ab abc abcd abcde abcdef ahf||

    The USMCA is a worse trade deal than NAFTA. The fact that you continue to deny it is just another indication of your economic illiteracy and Trump infatuation.

  • loveconstitution1789||

    Your citation fell off. Also your comparing and contrasting comment fell off too.

    Convince us. You wont even try.

  • a ab abc abcd abcde abcdef ahf||

    You're the one who asked if we wanted your linkage. Go ahead and deliver. But you won't, any more than Trump will, because you're an Always Trumper.

    While you're at it, show how Trump's managed trade is better for my individual liberty than simply unilaterally reducing tariffs to zero, and leave the liberty restrictions to foreigners.

  • loveconstitution1789||

    MAGA!

  • sarcasmic||

    MAGA!

    Ah yes. The mating call of Trumpus Dickus Suckus. They are annoying little animals that are known extreme stupidity and bright red plumage on the tops of their heads.

  • loveconstitution1789||

    Poor trolls like Sarcasmic. They hate hate HATE that Trump cracked China, Mexico, Canada, and the EU in less than 6 months.

  • sarcasmic||

    Note too that Trumpus Dickus Suckus are shameless liars that lie without shame.

  • loveconstitution1789||

    NO citation Sarcasmic trolling again.

  • a ab abc abcd abcde abcdef ahf||

    You're the Trumpista who asked if we wanted linkage. Several of us said YES. You haven't done so yet.

    You are as full of empty promises as Trump.

  • loveconstitution1789||

    MAGA!

  • buybuydandavis||

    MAGA Dittos!

  • gclancy51||

    After Tony, you're the biggest tard on this site. Live long and prosper my friend, your idiocy is a never-ending source of hilarity for us, the assiduous followers of reason who don't bother commenting usually.

  • Ken Shultz||

    "That's probably the best takeaway from the trade agreement between the United States and China that was announced Saturday at the G20 conference in Buenos Aires."

    There was no trade agreement announced on Saturday at the G20. Trump promised to delay the implementation of tariffs on another $200 billion in Chinese goods pending the outcome of further negotiations--apparently with a Trump imposed time limit of 60 days. That isn't a trade agreement. That's an agreement to negotiate a trade agreement.

    "Still, describing this as an agreement—or even, indeed, as a truce—is probably giving it too much credit."

    Some people might even describe it as a straw man.

  • ShotgunJimbo||

    "Still, describing this as an agreement—or even, indeed, as a truce—is probably giving it too much credit."

    Ya, his most faithful lemmings just need a turd for him to polish and plant a flag in, signalling he hasn't completely shit the bed, but that he just peed a lot and left some skid marks in it. They'll call it a great victory if he so much as sits down with Xi and the word trade is uttered, regardless of the result.

    The rest of the rational people out there are waiting for a real agreement.

  • Ken Shultz||

    If you want to take a cheap shot at Trump for this, why not go after this unfortunate misuse of terms:

    "My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward!"

    ----President Trump

    http://twitter.com/realDonaldT.....5199482881

    I guess that means relations with China are starving to death?

  • Nardz||

    Has Trump ever used the phrase "leap forward" - let alone a "BIG" one - before?
    Not to my knowledge.
    Methinks it was intentional.
    If so, the question is: why?

  • Ken Shultz||

    I think it's likely he wasn't clear on the meaning of the term (though he'd heard it before) and he was speaking from the hip.

  • Ken Shultz||

    One other curious observation about Trump's tweets in regards to China today:

    "President Xi and I have a very strong and personal relationship. He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations. A solution for North Korea is a great thing for China and ALL!"

    ----President Trump

    http://twitter.com/realDonaldT.....4180324352

    When this trade war started, people in the Trump administration were saying that it was in no small part about pressuring China to use their influence with North Korea to put a halt to its nuclear weapons program. The fat kid was summoned to Beijing ahead of his talks with Trump and seemed to use whatever influence they had to at least make North Korea say all the right things on camera for the North Korean summit.

    Once again, here's to hoping Trump is wildly successful in this. Trump deserves to be chastised for his reckless and wrongheaded trade policies and negotiation strategies--even if he's successful. Everybody who hopes he fails, however, should be ashamed of themselves. And we all know you're out there. Hell, that probably describes more than half of the White House press corp.

  • loveconstitution1789||

    Never Trumpers will never admit that Trump was even slightly successful in his strategies relating to trade and NK.

    They certainly will never acknowledge that Trump and his advisors did it, not only without them, but while they were actively trying to undermine the negotiations.

  • a ab abc abcd abcde abcdef ahf||

    When will any Always Trumper admit that Trump is trashing other people's individual rights? Not a one ever has. They all are glad he's doing it, they prattle on and on about the end goal, but won't admit that the means is trampling individual rights.

  • loveconstitution1789||

    ♫Trolls... trolls... everywhere trolls....

  • a ab abc abcd abcde abcdef ahf||

    loveconstitution1789|12.3.18 @ 10:20AM|#

    Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the "worseness" for us?
  • loveconstitution1789||

    mAgA!

  • creech||

    This "agreement" will not be given any play this week as a Trump "victory" because the media is too busy slavering over the memory of "America's greatest one term president."

  • buybuydandavis||

    " Trump deserves to be chastised for his reckless and wrongheaded trade policies and negotiation strategies--even if he's successful. "
    i.e.,
    "Even if Trump is successful exactly as predicted by his supporters, I will dogmatically cling to my theories that predicted otherwise."

  • a ab abc abcd abcde abcdef ahf||

    More to the point, "trade deficit" is a meaningless statistic dreamed up to scare people. You may as well discuss and ponder my trade deficit with the grocery store and car dealer, and my employer's trade deficit with me.

  • buybuydandavis||

    If you have a trade deficit with everyone, you've got a problem.

    Reason thinks there can be no downside to sending dollars to Emperor Xi because all he can do with them is "invest" in America.

    What he can do is *purchase* America. Ownership is *control*. I do not wish America to become a company town of Emperor Xi.

  • loveconstitution1789||

    MAGA!

  • a ab abc abcd abcde abcdef ahf||

    FIRA!

    Fuck Individual Rights Always!

  • loveconstitution1789||

    ♫Trolls... trolls... everywhere trolls....

  • a ab abc abcd abcde abcdef ahf||

    Where's that linkage you promised? Guess you keep your promises as well as Butt Plug.

  • loveconstitution1789||

    Trolls rack up website traffic but they dont donate shit to Reason.

  • a ab abc abcd abcde abcdef ahf||

    It's fascinating how all these Trumpistas promise better results "later", while bragging about his liberty restrictions now, as if that is their trade-off to make on everyone else's behalf. The end justifies the means and all that.

    I have not heard a single Trumpista ever admit that they enjoy restricting my liberty, but of course all of them whined when Obama and others did it.

  • Nardz||

    As opposed to just whining all the time?
    So productive

  • ||

    It's unlikely that a one-time boost in purchasing American exports will change that, and it's not at all clear that China will be able to pressure domestic businesses into making those purchases while the tariffs it erected against American farm products are still in place.

    Maybe Boehm isn't clear on how the Chinese economy works.

  • loveconstitution1789||

    It fits with his ignorance of how the US economy works.

  • a ab abc abcd abcde abcdef ahf||

    loveconstitution1789|12.3.18 @ 10:20AM|#

    Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the "worseness" for us?


    Keep on Keeping Your Promises.

  • loveconstitution1789||

    Got Hihn mad today. His other socks must have been banned already.

  • buybuydandavis||

    "Trump's G20 Deal With Xi Jinping Promises De-escalation of Trade War but Lacks Many Specifics"
    i.e.
    "Trump is doing something I want but I've got to bitch about something"

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