China is not going to live up to its phase one agreement. Not unless the U.S. cans Huawei chip bans, and ignores Hong Kong protests against Beijing.
Remember the phase one trade deal that the Republican Senate really wanted President Trump to ink with China (or else no quick impeachment acquittal, some DC insiders have told me) — well, it’s on life support.
“That phase one trade deal…we are left holding the bag,” says Lori Ann LaRocco, author of the book “Trade War: Containers Don’t Lie” and a trade columnist focused on supply chain data at industry publisher FreightWaves. “China has not met its obligations under the deal as of April 1 data and I think that trend still holds,” she says.
It sure looks that way.
It’s not Trump’s fault. No one in their right mind can say that Trump can force China to buy soybeans and pork meat, airplanes and LNG when its economy was crushed in a pandemic.
China does need to eat. China does need fuel, especially cheap fuel. It’s getting it elsewhere.
Here’s an example:
China is buying more Brazilian commodities and its not just because they’re fresh out of the ground. They are buying more than usual, meaning they will probably not need to buy much from the U. S. during crop season in the fall. We shall see.
For now, China accounted for 40.4% of Brazil’s exports in May. Despite the pandemic, despite weak economic growth, China has become an even bigger market for Brazil than ever before while other markets have shrunk.
