- China said it would buy an additional $200 billion worth of American imports the next two years as part of a phase-one trade deal with the US.
- The Trump administration has boasted this figure even as experts raised doubts about its feasibility.
- "The numbers are even more unrealistic than first believed," said Chad Bown, a trade policy expert at the Peterson Institute for International Economics.
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As the US and China begin to take steps to implement an interim trade agreement, questions are emerging over whether one of its central terms is too aggressive for even the largest economies to meet.
China said it would buy an additional $200 billion worth of American imports the next two years as part of a phase-one deal with the US, which was signed at a lavish White House ceremony last week. With its "America First" agenda in focus ahead of the November elections, the Trump administration has boasted this figure even as experts raised doubts about its feasibility.
"The numbers are even more unrealistic than first believed," Chad Bown, a trade policy expert at the Peterson Institute for International Economics, wrote in a recent analysis of the phase-one trade deal. "That matters, because with unrealistic export targets, the deal may be doomed from the start."
Under the agreement, China is expected to more than double its agricultural purchases from the US to a range of $40 billion to $50 billion through 2021. It also calls for China to increase manufactured imports by $75 billion over two years, energy by over $50 billion and services by $38 billion.
That would be a 92% increase of US exports of the covered products to China between 2017 and 2021, according to Bown. He added that exports to China have fallen sharply in those sectors since the start of the trade dispute, putting the phase-one targets further out of reach.
"The American companies and farmers tasked with meeting the new targets have suffered through two damaging years of tariffs since those robust export numbers of 2017," Bown said. "Beijing must now suddenly increase purchases by $240 billion over two short years."
For President Donald Trump and his supporters, that would represent a major win for American businesses that have suffered in the face of globalization. The president has long complained that the trade deficit with China has chipped away at employment and growth at home.
But it isn't clear that there is that level of demand in China, which hit its weakest pace of economic growth in nearly three decades in 2019. The phase-one agreement does not roll back any of the tariffs levied between the Trump administration and Beijing, though it does lower the rate of some on the US side.
"Promises to buy more US goods, of course, look like managed trade, not a market-based approach," Claire Reade, former assistant US Trade Representative, wrote Wednesday for the Center for Strategic and International Studies. "The agreement calls for major purchases as well, so it remains to be seen if the purchase targets can be met."