One year after the U.S.-China trade deal, high tariffs remain and American jobs suffer
Nearly a quarter million American jobs have been lost because of increased U.S.-China tariffs under the Trump administration, according to a new study by Oxford Economics. The trade deal a year ago kept almost all these tariffs in place.
Exactly a year ago, after 18 months of escalating tariffs and technology tensions, President Trump signed a largely superficial trade deal with China.
- Rather than resolving any of the most important economic issues in the U.S.-China relationship — Beijing avoided making any serious commitments to reduce industrial subsidies or stop cyber espionage, for example — Trump settled for a series of state-directed purchases of American goods.
- In exchange, China got a pause on tariff escalation. But according to the Peterson Institute for International Economics (PIIE), U.S. tariffs on Chinese imports remained at a level “more than six times higher than before the trade war began in 2018.”
An estimated 245,000 American jobs were lost because of increased U.S.-China tariffs, a new study by Oxford Economics found, per Reuters.
- The study also “estimates that U.S. exports to China support 1.2 million American jobs and that Chinese multinational companies directly employ 197,000 Americans,” showing the potential impact of further U.S.-China economic decoupling.
- Read the study here, via the U.S.-China Business Council, which commissioned it.
Other outcomes of the trade war, and deal, are also disappointing, according to the Wall Street Journal and Bloomberg.
- The purchases that Trump wanted didn’t materialize, partly due to the pandemic, and partly because they were never considered to be realistic targets in the first place, the Wall Street Journal reports. “China agreed to purchase about $159 billion in U.S. goods by the end of 2020. Through November, China’s actual purchases were about $82 billion, or about 52% of the target goal,” the WSJ says, citing Chad Bown of PIIE.
- Intellectual property protection improved in China, but it’s not clear at all that the trade deal was a driving factor, according to Bloomberg:
Mark Cohen, an expert on Chinese law…said that while Beijing has made “tremendous legislative changes” to strengthen IP protection in the past two years, its own motivation to enhance innovation may have been a more important factor than U.S. pressure…
Chinese companies paid a record $7.9 billion in intellectual property payments to the U.S. in 2019, up from $6.6 billion in 2016, and its courts imposed some record-breaking fines on IP infringement involving U.S. companies. But that rate of increase was slower than for its IP payments to the whole world, according to World Bank data, showing the payments to the U.S. were part of a general trend.
Read more:
- Trump’s China tech war backfires on automakers as chips run short / Reuters
- China shows renewed interest in joining trade pact Trump left in 2017 / SCMP
- No ‘end goal’ for U.S.-China trade war / The China Project
- More pain than gain: How the U.S.-China trade war hurt America / The China Project
- No immediate changes to U.S. China policy under Biden, including tariffs / The China Project
