Chiu-Ti Jansen

Opinion | Donald Trump’s ‘soybean solution’ to the US-China trade war is much ado about nothing

The ‘phase one’ trade deal is heavy on the window dressing and does not address contentious topics such as state subsidies and support for industrial initiatives

While more is expected of a ‘phase two’ deal, the US president is unlikely to embark on trickier trade negotiations next year with an election looming

Reading Time:4 minutes

Why you can trust SCMP

Chiu-Ti Jansen

Published: 9:00am, 18 Dec 2019Updated: 9:00am, 18 Dec 2019

US President Donald Trump’s chief trade negotiator Robert Lighthizer told the US House Ways and Means Committee on February 27 that any final agreement between the United States and China would be specific, measurable and enforceable at all levels of the Chinese government and that he had no interest in a “soybean solution”. But it appears that the so-called phase one deal was exactly that.

At the onset of the trade war, I had dinner with the US representative of a major Chinese state-owned company. He casually remarked: “Don’t worry, Trump and Xi [Jinping] will strike a private deal between the two to support their respective domestic political agenda. It will be largely a show.” And what a show it has been.

Cynics in the US and China have always argued that Trump would end the trade war whenever he felt he could declare victory to his voters. If this is the case, it is hard to imagine that the Trump administration would rock the boat by headlining the more difficult “phase two” negotiations in an election year.

Earlier this year, I interviewed Graham T. Allison, author of Destined for War: Can America and China Escape Thucydides's Trap?. Allison said he spoke to Chinese officials during a trip to Beijing soon after Trump’s meeting with Chinese President Xi Jinping at the G20 summit in Argentina, and learned that, after carefully studying the negotiation of the US-Mexico-Canada New Trade Agreement (USMCA), the Chinese concluded that there was only a 10 to 15 per cent difference between the old North Atlantic Free Trade Agreement and the new deal. Given this, the Chinese would not be likely to satisfy more than 15 per cent of the “hundreds” of US trade representative’s demands of China.

US Senate Minority Leader Chuck Schumer, a Democrat cheerleader of Trump’s hardline approach to China, was not impressed by the recent US-China accord. He tweeted: “President Trump has sold out for a temporary and unreliable promise from China to purchase some soybeans. Once again, President Trump cannot be relied upon to the do the right thing for American workers and businesses.”