Back in January of 2020, shortly before the pandemic hit, Donald Trump concluded a series of negotiations with China and inked a deal in which the Chinese would purchase an extra $200 billion worth of United States exports over the coming two years. It was, at the time, viewed as a serious coup for Trump who was still hustling to grow the economy as rapidly as possible, and cutting down our trade deficit with China was seen as an important part of that formula. Now the two years have ended, so how did we make out as a result of that arrangement? As it turns out, China failed to purchase the full $200 billion in U.S. exports. The number was significantly lower. In fact… the number was zero. China actually purchased fewer U.S. exports than they had been buying prior to the arrangement, coming in at roughly 57% of the previous levels. (piie.com)

Two years ago, President Donald Trump signed what he called a “historical trade deal” with China that committed China to purchase $200 billion of additional US exports before December 31, 2021. Today the only undisputed “historical” aspect of that agreement is its failure. One lesson is not to make deals that cannot be fulfilled when unforeseen events inevitably occur—in this case, a pandemic and a recession. Another is not to forget the complementary policies needed to give an agreement a chance to succeed.

In the end, China bought only 57 percent of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war.[1] Put differently, China bought none of the additional $200 billion of exports Trump’s deal had promised.

Trump’s “phase one” agreement with his “very, very good friend” President Xi Jinping was not a total washout. The deal did halt his spiraling trade war. And several of its elements should be kept, notably China’s commitments to remove technical barriers to US farm exports, respect intellectual property, and open up its financial services sector.

If we’re going to be fair here, it’s impossible to ignore the fact that the deal was made before we knew about the gigantic crapstorm that was heading our way thanks to the novel coronavirus. (That’s one “export” from China that we could clearly have done without.) Once the economies of both nations essentially shut down, production levels plummeted. Travel and transportation restrictions added to the downward pressure being exerted on both imports and exports.

It wasn’t just durable goods that were affected, either. A lot of that international economic activity revolved around tourism and business travel. Those sectors were also crushed for all of 2020 and most of 2021. So in the end, the deal was well-intentioned, at least on our part, but it completely failed to bear fruit for reasons beyond our control.

At the same time, we should remember that we’re dealing with a different sort of China than Trump was first talking to in 2017. There is no doubt that the Chinese Communist Party was already quite a ways along with their long-range plans to dominate the global supply chain and expand their international influence. But back then they were still at least making an effort to paint a happy face on the situation and act as of they were still eager trading partners who just wanted to see business flourish.

Now the mask has been fully pulled from China’s face. They have solidified their alliance with America’s largest adversaries and are using much of the money they made from us and others to extend their reach through the Belt and Road initiative, along with buying influence in troubled regions of the world like Afghanistan. They have invested heavily in expanding their military and still seem intent on subduing Taiwan, a traditional ally of the west.

This is the new China, though all of this unpleasantness was no doubt bubbling below the surface long before it became obvious. Perhaps the failure of a trade deal with them isn’t what we should really be worried about. Any modern approach to the China problem should focus on moving the production of goods and services back to the United States and our western allies and away from the Chinese. Giving them the keys to the global supply chain in the hope that enough capitalism would lure them toward a more fair and open society was one of the west’s worst collective blunders in a very long time. And we’ll likely be paying the price for it for many years or decades to come.