“The so-called “phase one” trade deal inked in December 2019 by former President Donald Trump and Chinese President Xi Jinping might have put an end to the spiraling trade war between the two countries, but the agreement did not result in China buying more American goods, as both leaders promised it would. In fact, during the two years covered by the deal, China imported fewer American goods than before the trade war began—meaning that the deal did not even succeed at patching up the damage caused by Trump’s bellicose trade policies.”
…
“We now know that the promised benefits did not materialize. But the costs certainly keep adding up. Auto manufacturers, for example, shifted supply chains to avoid the cost of tariffs and economic uncertainty created by the trade war—by relocating some American manufacturing jobs to China, which has become a large and growing market for auto sales. BMW, for example, shifted much of the production of its X3 sport-utility vehicle from Spartanburg, South Carolina, to China after reporting that tariffs had cut the company’s American profits by about $338 million in 2018. The higher costs imposed by the trade war caused Tesla to announce that it was “accelerating construction” of a new plant in Shanghai.
Overall, Bown estimates, exports to China would have been $26 billion higher in 2020 and $39 billion higher in 2021 if not for the impact of the trade war and subsequent trade deal. That doesn’t account for other losses sustained during the trade war, like the increased farm subsidies paid for by American taxpayers and the run-of-the-mill cost increases created by tariffs.
Aside from some positive developments with regard to China’s treatment of intellectual property and financial services, probably the only good thing about Trump’s “phase one” trade deal is that it has now expired.
“President Trump’s trade war and phase one agreement did little to change China’s economic policymaking,” Bown concludes. “Beijing seems intent on becoming more state-centered and less market oriented.””
“Dozens of countries across the Middle East, South Asia, and North Africa that already suffer from food insecurity rely on Russia’s and Ukraine’s bountiful supplies of wheat, corn, and vegetable oil, and experts say the conflict could send food prices rising and
“Behind the rude awakening on energy security lies an even more unsettling realization for many German elites: That a decades-long goal of bringing Berlin and Moscow closer together through mutually beneficial trade seems to have failed.”
…
“The idea that growing trade links with other nations would help to gradually embed Western democratic standards in those countries has already taken a hit when it comes to China, which has only become more and more repressive despite growing economic links. Still, leading German politicians have long held out hope that “Wandel durch Handel” might still work with Russia, and defended Nord Stream 2 as a tool to also influence Russia for the better.
“Obviously, this policy has totally failed when it comes to Russia,” said Marcel Dirsus, a non-resident fellow at the Institute for Security Policy at Kiel University. He argued that instead of influencing Moscow by making Russia more dependent on Germany, the policy had the opposite effect.
“Right now, when push comes to shove, Berlin is dependent on Moscow when it comes to energy, and that influences the way it positions itself,” he said, referring to Berlin’s initial reluctance to include Nord Stream 2 in potential sanctions against Russia in the case of further aggression against Ukraine.
It took weeks of internal bickering and harsh international criticism before Scholz’s Social Democrats agreed to put the pipeline on the sanctions table.
“Now, they are coming to this realization [that they are too reliant on Russia] and now they are also admitting it in public, but now it’s too late,” Dirsus said.”
“The latest package would issue sanctions on two major Russian banks and on the country’s sovereign debt, meaning it can no longer raise money from the West and trade new debt on U.S. or European markets, the president said. Starting tomorrow, the U.S. will also impose sanctions on Russian elites and their family members, he added.
Biden called the moves “the first tranche” of punitive measures the U.S. is prepared to take, and he said they would go far beyond the steps the U.S. and its allies took in response to Russia’s invasion of Crimea in 2014.
“This is a flagrant violation of international law, and it demands a firm response from the international community,” he said of Putin’s decision to send Russian forces into the territories.
Biden also said the U.S. would continue to provide defensive assistance to Ukraine in the meantime, and said he has authorized additional movements of U.S. forces and equipment already stationed in Europe “to strengthen our Baltic allies — Estonia, Latvia and Lithuania.””
“Even on the day two years ago that the trade deal was inked, there was skepticism that China would live up to its pledge to spend $200 billion more on U.S. goods and services.
But a new study finds China didn’t even spend an additional dime on U.S. products.”
…
“China agreed to buy at least $227.9 billion of U.S. exports in 2020 and $274.5 billion in 2021, for a total of $502.4 billion over the pact’s two years, he noted. In reality: U.S. exports of covered goods and services to China over the two years totaled $288.8 billion.”
“Because of the warming diplomatic ties between Lithuania and Taiwan, China has unleashed a strict embargo against the Baltic nation — boycotting not only its exports but even goods from other EU countries made with Lithuanian components.
To help ease the pain for its most dogged European ally, Taiwan has announced a $200 million investment plan. And that raises the prospect of co-operation on chips.
Taiwan’s investment plans in Lithuania are not yet finalized, pending studies to be conducted by a team of Taiwanese experts within the next few months. But in an interview with POLITICO, the top Taiwanese diplomat in Vilnius said nothing was off the table, and that Lithuania could act as an inroad to the rest of the European semiconductor market.”
…
““Taiwan is playing its economic cards smartly,” Mathieu Duchâtel, director of the Asia Program at the Paris-based Institut Montaigne said. “Clearly, Taiwan has something concrete to offer to strengthen the European semiconductor ecosystem, and the message is that this is linked to deepening Taiwan’s international space — so this is a form of economic statecraft.””
“President Joe Biden..signed a bill to curb forced labor in China that U.S. business groups and trade experts warn will inflict unnecessary pain on U.S. firms and punish legitimately employed Uyghur Muslims in China’s Xinjiang region.
The Uyghur Forced Labor Prevention Act, which was approved after more than a year’s delay, is designed to insulate U.S. companies and consumers from complicity in forced labor practices in Xinjiang. The U.S. government has concluded that the practices are among abusive state policies targeting Uyghurs that constitute genocide.
But industry groups and trade lawyers say the law’s strict compliance standards coupled with problematic Customs and Border Protection enforcement will harm both U.S. business interests and Uyghur Muslims.”
…
““If you’re a company who is manufacturing in that area, you’re going to need to prove that slaves didn’t make it. The presumption is on you,” Rubio said after the bill’s Dec. 16 Senate passage.”
…
“Assertions of the law’s stringent compliance standards are no exaggeration. It imposes a presumption of guilt in terms of forced labor links to any Xinjiang-sourced imports — predominately agricultural and chemical products — and obligates importers to provide documentation that proves its Xinjiang supply chains are not tied to forced labor.
The experience of solar and apparel companies from previous forced labor enforcement actions by Customs and Border Protection suggest that the new law’s compliance standards will be “practically impossible” to meet, said former CBP trade lawyer Richard Mojica.”
…
“Mojica and other trade lawyers say the law’s compliance requirements will most seriously impact small- and medium-sized U.S. firms that lack in-house expertise to reliably map complex overseas supply chains.”
“The Uyghur Forced Labor Prevention Act effectively bans all imports from China’s Xinjiang region, where the U.S. government has said that the Chinese Communist Party is perpetrating a genocide against the religious minority, including slave labor, forced sterilizations and concentration camps. Under the terms of the bill, companies that produce goods in Xinjiang can be granted an exception if they show proof that those products are not made using forced labor.
“Many companies have already taken steps to clean up their supply chains,” Rubio said. “For those who have not done that, they’ll no longer be able to continue to make Americans — every one of us, frankly — unwitting accomplices in the atrocities, in the genocide that’s being committed by the Chinese Communist Party.””