Yellen expresses doubts over outcome of Trump’s China trade deal

US Treasury Secretary Janet Yellen has expressed doubts over last year’s trade deal with China, the first clear statement from the Biden administration detailing its thinking on the future of the deal between the two largest economies in the world.

“My personal view is that the tariffs have not been put in place on China in a very thoughtful way,” she told The New York Times in a statement. interview as she returned to the United States last week. “Tariffs are taxes on consumers. In some cases, it seems to me that what we’ve done has hurt American consumers, and the kind of deal that the previous administration negotiated really didn’t address in many ways the fundamental issues we have with China.

The deal signed between the Trump administration and China in January 2020 aimed to end a damaging trade war that triggered tariffs on billions of dollars in goods. The Biden administration must decide whether to keep the deal, remove it, or seek to replace it with something new.

Eighteen months later, the deal turned out to be a truce at best, with both sides continuing to pay more for many imports. But it is also a space of stability in a relationship that has continued to deteriorate, with the rise in tensions over Hong Kong, Taiwan, human rights and the origins of the Covid-19 pandemic.

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For its part, the Chinese government mostly praised the trade deal, although it criticized US actions and statements in other tense areas.

“The first phase of the agreement is good for China, good for the United States and good for the whole world,” said Gao Feng, spokesman for the Ministry of Commerce. told reporters last week in Beijing.

But even before Yellen’s remarks, some in China were pessimistic about the deal’s future.

“The current relative calm on the trade front does not seem to bode bright days, but storms,” said former diplomat and trade manager Zhou Xiaoming. wrote last week in an editorial. “While still revising its stance towards China,” the Biden administration can be expected to act more decisively and aggressively later this year, he wrote.

Chinese surplus constantly growing

The deal did not reduce the United States’ trade deficit with China, one of former President Donald Trump’s goals.

U.S. exports to China hit a record high in the first quarter of the year, but imports from the mainland soared, spiked first by masks and protective gear, then electronics and home work equipment, and now by the rebound in general consumption as the economy opens up and people spend their stimulus money.

Surplus on the rise

China’s export boom overtook imports and hit record

Source: General Administration of Customs of China

The purchasing targets agreed by China expire at the end of the year, and China is far behind where they promised they would be now, although the total is expected to rise as the agricultural products he bought are harvested and delivered. The two sides also agreed that China’s purchases will continue to increase from 2022 to 2025, although no details have been made public.