CHINAMacroReporter

The Phase One Trade Deal

‘The good news is that 80% of our members said they thought the Phase One agreement was a good thing.' 'But only 19% said it was worth it.' 'What the 80% said they are happy about was that there no more new tariffs were coming immediately.’
by

|

CHINADebate

May 6, 2020
The Phase One Trade Deal

1. Why Members Are Happy with the Phase One Deal

2. The Phase One Trade Deal

3. Should the Tariffs on China be Lifted During the Pandemic?

1. Why Members Are Happy with the Phase One Deal

‘The good news is that 80% of our members said they thought the Phase One agreement was a good thing.' 'But only 19% said it was worth it.' 'What the 80% said they are happy about was that there no more new tariffs were coming immediately.’

U.S.-China Business Council. 'The US-China Business Council (USCBC) is a private, nonpartisan, nonprofit organization of approximately 200 American companies that do business with China.'

  • 'Founded in 1973, USCBC has provided unmatched information, advisory, advocacy, and program services to its members for over four decades.'

Craig Allen. ‘Prior to joining USCBC as president in 2018, Craig Allen had a long, distinguished career in US public service.’

  • ‘Craig began his government career in 1985 at the Department of Commerce’s International Trade Administration (ITA).’  
  • ‘In 2002, he was promoted to the Minister Counselor rank of the Senior Foreign Service.’
  • ‘He later served as Deputy Assistant Secretary for Asia at the US Department of Commerce’s International Trade Administration, then Deputy Assistant Secretary for China.’  ·
  • 'Craig became the United States ambassador to Brunei Darussalam on December 19, 2014.’

2. The Phase One Trade Deal

Malcolm Riddell: ‘What did we accomplish in the Phase One trade deal?’

Craig Allen: ‘Well, not a lot yet. But the Phase One deal, I think, is good.’

  • ‘It’s delivering, particularly for farmers, intellectual property rights holders, and financial services firms.’

‘Let's hope the purchase targets the Chinese and the American sides have agreed to will actually work.’

  • ‘But we need to be realistic about that.’

Malcolm Riddell:  ‘The trade war caused a lot of dislocation and disruption. I just don't think that was worth some extra purchases.’

Craig Allen: ‘Well, we did an interesting survey of our members about that.’

  • ‘The good news is that 80% of our members said they thought the Phase One agreement was a good thing - it was positive.’
  • ‘But only 19% said it was worth it.’
  • ‘And what the 80% said they are happy about was that there no more new tariffs were coming immediately.’

‘We have to remember, the United States maintains, by our rough calculation, 89% of the tariffs that were already in place.’

‘Thus, we have 25% tariffs on $370 billion worth of Chinese imports.’

  • ‘And one has to wonder if they're there in perpetuity or not.’

‘The 20% who are not happy are mostly manufacturers.’

  • ‘American manufacturing has really been impacted by the U.S tariffs and then by the counter- tariffs from China as well.’
  • ‘Especially many small – and medium-size American manufacturers that bought so many industrial, intermediates - be it paint or buttons or zipper or machinery or whatever from China.’

3. Should the Tariffs on China be Lifted During the Pandemic?

‘But the Trump administration seems to want to keep the tariffs on China.’

Malcolm Riddell: ‘Has the U.S.-China Business Council called for the tariffs on China to be lifted?’

Craig Allen: ‘We’ve been advocating that tariffs be lifted for the duration of this epidemiological and economic crisis.’

‘But the Trump administration seems to want to keep the tariffs on China.’

  • ‘Within the USTR the thinking is that this would reduce their leverage in negotiations on Phase Two.’
  • ‘In the White House there is the belief that the President has articulated many times that the Chinese are paying the tariff, not the Americans. Therefore it would not do the Americans any good to get rid of the tariffs.’

‘I think that's just factually wrong.'

  • ‘But it's, as the French say, an "idée fixe" - a fixed idea among some people, and they're just not going to change.’
  • ‘Have no doubt though: It's American families, American small- and medium-size enterprises, and American farmers that are paying the tariffs.’

‘Because of our position on trade and tariffs and because we counter the president’s narrative by asserting that the Chinese are not paying the tariffs, President Trump has said somebody should look into the U.S.-China Business Council to see who's funding them.’

  • ‘We contradict this. Our funding is 100% from American companies - not one penny from any Chinese entity.’
  • ‘Our positions are those that we believe benefit U.S. companies and the U.S. economy. Period.’

‘Although it's difficult to draw a one-to-one correspondence between a decline in exports and, jobs, it is a factor.’

  • ‘It’s fair to say that we've lost about $20 billion annually in exports.’
  • ‘That’s about a 100,000 or more U.S. jobs – and that’s only on the export side.’
  • ‘When you add services and you add the dislocations from imports, it would be significantly more than that.’  

‘A hundred thousand U.S. manufacturing jobs lost out of a labor pool of 160 million or so – not a huge percentage.’

  • ‘But consider: In 2018 and 2019, those people who lost their jobs were able to find new jobs - that's no longer true in 2020.’
  • ‘Therefore just revoking the tariffs would have a significant impact on employment, particularly in the agricultural States, in the manufacturing states of the Midwest.’

More

CHINAMacroReporter

October 31, 2022
Xi's China: 'less reliable, less predictable, and less efficient'
‘China’s predictability is being eroded by the frequent, erratic policy shifts that have taken place in recent months, such as the unexpected disruptions to power supplies that took place in 2021, and the sudden mass lockdowns that were imposed in an attempt to contain COVID.'
keep reading
October 18, 2022
Xi Jinping: ‘Crossing a threshold to outright dictatorship?’'
The view from inside China appears to be quite different. Yes, the Chinese people may grumble about the Zero-COVID lockdowns, and just a few days a banner critical of Mr. Xi and his regime was unveiled over an overpass in Beijing.
keep reading
October 10, 2022
The 20th Party Congress with All Eyes are on Xi Jinping
The attention to Mr. Xi is in large part because he will exit the Party Congress with even greater power, no discernible opposition, and a new five-year term (with more likely to follow). And many of the constraints that may have been in place not to jeopardize his reappointment will be gone.
keep reading
May 27, 2021
'Demography + Technology is Destiny'
The census showed that the number of births nationwide fell to the lowest level since 1961, following a nationwide, manmade, famine caused by Mao’s “Great Leap Forward” that killed tens of millions of people, and that China’s total population could peak in the next few years.
keep reading
May 27, 2021
'China: Births Falling'
‘China’s total population could peak in the next few years, spurring profound changes for the world’s second-biggest economy.’
keep reading
May 27, 2021
'Demography + Technology is Destiny'
The census showed that the number of births nationwide fell to the lowest level since 1961, following a nationwide, manmade, famine caused by Mao’s “Great Leap Forward” that killed tens of millions of people, and that China’s total population could peak in the next few years.
keep reading
May 27, 2021
'China: Getting Old Before Getting Rich'
‘Over the past two generations, China has seen a collapse in fertility, exacerbated by Beijing’s ruthless population-control programs.’ ‘With decades of extremely low fertility in its immediate past, decades more of that to come, and no likelihood of mass immigration, China will see its population peak by 2027.’
keep reading
May 27, 2021
'China Bets on Productivity Over Population to Drive Its Economy'
‘Beijing has a two-pronged approach to maintaining economic growth as its population shrinks.’ ‘First, it intends to slow the decline of the urban workforce by raising the retirement age and encouraging migration of more of the country’s 510 million rural residents to cities.’ ‘Second, it plans to raise productivity -- a measure of economic output per worker -- with the latest five-year plan emphasizing better vocational education and more investment in scientific research, automation and digital infrastructure.’ [see second chart above]
keep reading
May 27, 2021
'China: Getting Old Before Getting Rich'
‘Over the past two generations, China has seen a collapse in fertility, exacerbated by Beijing’s ruthless population-control programs.’ ‘With decades of extremely low fertility in its immediate past, decades more of that to come, and no likelihood of mass immigration, China will see its population peak by 2027.’
keep reading
May 27, 2021
'China: Births Falling'
‘China’s total population could peak in the next few years, spurring profound changes for the world’s second-biggest economy.’
keep reading
May 27, 2021
'Why Demographics is (Close to) Destiny'
‘Demographics may not be destiny, but for students of geopolitics, they come close.’
keep reading
May 27, 2021
'Sex and the Chinese Economy'
‘A rise in China’s male-female ratio may have contributed to between one-third and one-half of the increase in its trade surplus with other countries.’ ‘The sex imbalance thus likely underpins an important source of tension between China and the US. Yet bilateral engagement has paid scant attention to this linkage.’
keep reading
May 27, 2021
'Lousy demographics will not stop China’s rise'
‘The old maxim ‘demography is destiny’ no longer holds in the same way that it used to.’ ‘A shrinking and ageing population may not have the same gloomy implications in the 21st century.’
keep reading
May 20, 2021
'Apple in China: No Plan B'
“This business model only really fits and works in China. But then you’re married to China.” ‘The Chinese government was starting to pass laws that gave the country greater leverage over Apple, and Mr. Xi would soon start seeking concessions. Apple had no Plan B.’
keep reading
May 20, 2021
'Tim Cook and Apple Bet Everything on China.'
‘For Apple, a clean break with China is impossible.’
keep reading
May 20, 2021
'Apple held hostage by its Chinese puzzle'
"The massive and complete supply chain ecosystem in China is key to the iPhone maker's success, but it has also created a gigantic organism that would struggle to move somewhere else."
keep reading
May 20, 2021
‘Censorship, Surveillance and Profits: A Hard Bargain for Apple in China’
‘Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.’
keep reading
May 20, 2021
Apple in China
‘But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government.’ ‘Behind the scenes, Apple has constructed a bureaucracy that has become a powerful tool in China’s vast censorship operation.’
keep reading
May 20, 2021
'Apple Reaches $2 Trillion'
“This business model only really fits and works in China. But then you’re married to China.” ‘The Chinese government was starting to pass laws that gave the country greater leverage over Apple, and Mr. Xi would soon start seeking concessions. Apple had no Plan B.’
keep reading
May 15, 2021
‘Scenario Three: Leadership Challenge or Coup
‘By removing de jure term limits on the office of the presidency — and thus far refusing to nominate his successor for this and his other leadership positions — Xi has solidified his own authority at the expense of the most important political reform of the last four decades: the regular and peaceful transfer of power.’
keep reading
May 15, 2021
Invitation to a Trivium Flash Talk: 'China's Data Environment from a Big-Picture Perspective.’
‘This talk is designed to cut through the tech and legal jargon, and lay out the top-level strategic rationale underpinning China's thinking on data. We'll cover:’
keep reading
May 15, 2021
Invitation to a Trivium Flash Talk: 'China's Data Environment from a Big-Picture Perspective.’
‘This talk is designed to cut through the tech and legal jargon, and lay out the top-level strategic rationale underpinning China's thinking on data. We'll cover:’
keep reading
May 15, 2021
After Xi: A Succession Crisis to Rock the World
A new risk to add to your analyses and strategic planning: A succession crisis in China. By removing term limits on his stay in office and by not naming a successor, Secretary General Xi Jinping ‘has pushed China towards a potential destabilising succession crisis, one with profound implications for the international order and global commerce,’ writes Richard McGregor of the Lowy Institute and Jude Blanchette of the Center for Strategic & International Studies
keep reading
May 15, 2021
‘Scenario Four: Unexpected Death or Incapacitation'
‘Even if the CCP’s claim that Xi Jinping has no designs to remain in office for life is true, his evisceration of succession norms leaves the country ill-prepared for his sudden death or incapacitation.’
keep reading
May 15, 2021
'Regime change in China is not only possible, it is imperative.'
‘We must make regime change in China the highest goal of our strategy towards that country.’ ‘The US and its allies cannot dictate to China the political system by which it is governed. But they can and must engineer conditions which embolden and enable those in China who also want regime change to achieve it.’
keep reading
May 15, 2021
After Xi: A Succession Crisis to Rock the World
A new risk to add to your analyses and strategic planning: A succession crisis in China. By removing term limits on his stay in office and by not naming a successor, Secretary General Xi Jinping ‘has pushed China towards a potential destabilising succession crisis, one with profound implications for the international order and global commerce,’ writes Richard McGregor of the Lowy Institute and Jude Blanchette of the Center for Strategic & International Studies
keep reading
May 15, 2021
'Regime change in China is not only possible, it is imperative.'
‘We must make regime change in China the highest goal of our strategy towards that country.’ ‘The US and its allies cannot dictate to China the political system by which it is governed. But they can and must engineer conditions which embolden and enable those in China who also want regime change to achieve it.’
keep reading
May 15, 2021
'After Xi: China's potentially destabilising succession crisis'
‘By removing de jure term limits on the office of the presidency — and thus far refusing to nominate his successor for this and his other leadership positions — Xi has solidified his own authority at the expense of the most important political reform of the last four decades: the regular and peaceful transfer of power.’ ‘In doing so, he has pushed China towards a potential destabilising succession crisis, one with profound implications for the international order and global commerce.’
keep reading
May 15, 2021
‘Scenario One & Two: Xi Steps Down'
‘In this scenario, Xi thwarts the current consensus by handing over his leadership positions to at least one individual from the current Politburo Standing Committee (as per existing regulations).’
keep reading
May 12, 2021
The Poem that Cost Billions
The billion dollar losses that came from quoting an 1,100-year-old poem, toWhy foreign companies in China have Stockholm Syndrome
keep reading
May 10, 2021
'A 1,100-Year-Old Poem Cost Meituan’s Outspoken CEO US $2.5 Billions'
‘On Monday, because of an 1,100-year old poem about events 2,200 years ago posted by the founder of food delivery giant Meituan, investors panicked, and sank the company’s market cap by $15.6 billion. And Meituan CEO Wang Xing, who posted the poem, lost $2.5 billion of his wealth.’
keep reading
May 9, 2021
'The Housing Bubble That Just Won’t Pop'
‘China’s cities are plagued by a diverging trend: high demand and exorbitant prices for residential properties in tier 1 cities and yet an oversupply in smaller, lower-tiered cities.’
keep reading
May 7, 2021
'Would China really invade Taiwan?'
‘Is Taiwan really "the most dangerous place on earth?" No. Or at least, not right now.’
keep reading
May 7, 2021
'Don't Help China By Hyping Risk Of War Over Taiwan'
‘China is marshaling its full range of capabilities to intensify pressure on Taiwan below the threshold of conflict.’ ‘Beijing's goal is to constantly remind Taiwan's people of its growing power, induce pessimism about Taiwan's future, deepen splits within the island's political system and show that outside powers are impotent to counter its flexes.' ‘Its approach is guided by the Chinese aphorism, "Once ripe, the melon will drop from its stem [瓜熟蒂落]," ’‘This strategy may require more time than war, but it would come at less cost and risk to Beijing.’
keep reading
May 7, 2021
'China Threat: A "perception gap" between the U.S. and Taiwan'
‘While the U.S. talks up the medium-term military threat, the democratic island sees the moves as part of a bigger, more immediate problem: "gray zone" warfare from Beijing that is meant to wear down the morale of not just the Taiwanese military, but also the island's people.’
keep reading
May 7, 2021
'The most dangerous place on Earth'
‘Taiwan is an arena for the rivalry between China and America.’ ‘Although the United States is not treaty-bound to defend Taiwan, a Chinese assault would be a test of America’s military might and its diplomatic and political resolve.’
keep reading
May 7, 2021
'The Most Dangerous Place on Earth'
‘China's top priority now and in the foreseeable future is to deter Taiwan independence rather than compel unification,’ note Richard Bush (Brookings (retired)), Bonnie Glaser (German Marshall Fund in America), and Ryan Hass (Brookings Institution)
keep reading

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.