I’ve now read several stories purporting to outline President Trump’s new trade deal with China. All of them point in the same direction: nowhere. Trump will eliminate his tariffs, China will eliminate its retaliatory tariffs, and China will also agree to buy a few billion dollars worth of stuff it wanted anyway (LNG, soybeans, etc.). There will also be some vague movements in the direction of opening China’s economy, but mostly things that were already in progress two years ago before Trump derailed them.
In other words, after two years of huffing and puffing, Trump will get next to nothing. Just like he got next to nothing from Canada and Mexico in the NAFTA negotiations. And just like he’s so far gotten nothing from Europe. But no worries. To distract everyone’s attention from his failures, Trump has a new target: India. Here is the Washington Post:
On Monday, Trump notified Congress that the United States intends to end the preferential treatment for a host of Indian goods that now enter the country duty-free. The changes will not take effect for at least 60 days. In a letter, Trump said India would no longer receive benefits under the Generalized System of Preferences, which was set up to promote trade from developing countries. India is the GSP’s biggest beneficiary and exports about $5.6 billion in goods to the United States under the program, including motor vehicle parts, precious-metal jewelry and insulated cables.
Needless to say, this will go nowhere. Where else can it go? Even if India caves completely and provides the US with $5.6 billion worth of trade concessions in order to regain its GSP status, who cares? We export about $1.5 trillion in goods per year. Adding $5 billion is a drop in a bucket.
Still, it gives Trump some dark-skinned people to act tough about, and that’s what matters.