Trump’s “Phase One” Trade Deal Leaves China With Massive Advantage

Back in October, financial markets and other interested parties woke up to the exciting news that, according to Donald Trump, the United States had reached a “very substantial phase-one deal” with China, constituting the first step in a series of steps that would hopefully end the longtime trade war with Beijing and make the pain that American farmers, companies, consumers, and the economy at large had suffered over the last two years all worth it in the end. Like most Trump proclamations, though, this one turned out to be a lie. We knew this both in real time, as news outlets reported that China wanted another round of talks before even thinking about signing “phase one” of the trade deal and on Tuesday, it was made yet more clear when Trump again announced striking a phase one deal—more than two months after he’d already claimed one had been clinched:

While Trump has lied about negotiating a deal with China numerous times by now—in December 2018, he bragged to reporters that he’d struck an “incredible” deal with President Xi Jinping that blew up in his face less than 24 hours later; in August, a breakthrough call with China turned out to be fictional—at this point, there’s no suggestion that he is, once again, just making shit up as he goes along. That’s the good news. The less-good news? His big, terrific phase one deal appears to accomplish very little, and on a matter that both the president and his top advisers have said is crucial to bringing fairness to the markets, literally no progress has been made. Per the Washington Post:

President Trump’s trade deal with Beijing leaves untouched the marriage of business and government known as China Inc. that American executives for nearly two decades have said tilted global markets against them. Trump insisted for months that he wanted to resolve all outstanding trade issues with China in a single, comprehensive accord that would refashion the Chinese state’s economic role. As late as September, he rejected talk of a partial agreement, saying instead that he wanted “the big deal.” The two sides discussed industrial subsidies in the early rounds of negotiations over an agreement that exceeded 150 pages. But Chinese officials resisted making structural changes, and by the time officials settled this month on an 86-page partial accord, any commitments to reduce subsidies had been excised.