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Inside the Sudden Collapse of the US-China Trade Deal

Bad faith

My take on how things collapsed is that the Chinese were not negotiating in good faith, and were not prepared to back off on the key issues of theft of trade secrets and forced technology transfers.

I think the plan by the Chinese was to move forward on a deal, and then welch on those key issues at the last possible second, wagering that the US was more interested in holding a summit and declaring victory than actually accomplishing anything substantive. This is how US foreign politics have worked since the end of the Reagan era, for almost thirty years, and partly why we look so weak and unserious to the rest of the globe.

Unfortunately, the Chinese don’t seem to have realized Trump was actually serious about his demands. This miscalculation led to China getting slapped with more tariffs:

The U.S. and Chinese governments both sent signals ahead of their trade talks in Washington last week that a pact was so near they would discuss the logistics of a signing ceremony.

In a matter of days, the dynamic shifted so markedly that the Chinese deliberated whether to even show up after President Trump ordered a last-minute increase in tariffs on Chinese imports because the U.S. viewed China as reneging on previous commitments.

After huddling Tuesday to analyze a press conference given by the U.S.’s two top negotiators, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, Chinese officials concluded that they should travel to at least avoid a rift that could be difficult to repair.

They were playing games with us,” said one senior U.S. trade official of the talks in Washington three months ago. Mr. Kudlow told reporters at the time that Mr. Lighthizer “read them the riot act.”

The more heated moments have been in situations where we thought we had something and suddenly there was some backsliding,” said one person involved in the discussions on the U.S. side.

“We’ve expressed some pretty serious frustration at times,” this person said. “It’s been a necessary ingredient to success. You can be nice to someone, but sometimes you need to say ‘stop screwing me.’ ”

While the Western media loves to talk about how doomed America is and how it’s failing at everything, in fact, I think recent moves by Chinese leadership look increasingly bungling and inept. Virtually all of China’s neighbors are now hostile toward it, even countries like Indonesia and the Philippines. Their economy is struggling and GDP growth is slowing, and it is increasingly at odds with its largest trading partner, the United States.

The Chinese have also made several blunders during these trade talks, and they keep assuming Trump is non-serious and expect him to just cave in the same way the last four presidents did for America’s rivals and foes. The collapse of the deal likely came as a total surprise to them, and they are clearly scrambling now for a way to save face in the wake of the collapse.

All of these mistakes do not sound like a recipe for China’s national and economic success to me, but what do I know? I’m just a guy who blogs as a hobby.

 
Doomberg

Written by Doomberg

I am Doomberg, one of the original founding members of Sparta Report, and have been here since the beginning. I am an insatiable news junkie and enjoy reading and writing about the US territories, the Caribbean, video games, smartphones, and of course conservative politics in general.

I also really like pictures of gas stations and claim full responsibility for the silly gas station motif. I'm presently trapped behind enemy lines in a blue state with no hope of escape! The ride never ends.

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