Ethics & Public Policy Center

The New Trade Deal With China Could Be the Calm Before the Storm

Published in The Washington Post on January 15, 2020

The stock market has been breathing a sigh of relief over Wednesday’s “phase one” trade deal with China. They should take another breath, though, as this is simply a truce in a battle that will likely resume after November’s election.

Both countries had ample reason to call a temporary halt to their struggle. Chinese growth has slowed significantly, to its lowest point in nearly 30 years. Automobile sales dropped by more than 8 percent last year, and that was on top of a 3 percent decline in 2018. President Trump’s threat to impose even more tariffs on Chinese imports in mid-December forecast even further problems for the export-dependent Chinese economy if they took place.

Trump had his own reasons to hit the pause button on the trade war. He’s entering an election year, and the trade war had been hurting farmers and manufacturers dependent upon Chinese-produced raw materials. Calling a temporary halt gives those producers a chance to grow, which in turn can only help Trump’s reelection effort.

Click here to read the rest of this piece at the Washington Post’s website.

Henry Olsen is a senior fellow at the Ethics and Public Policy Center.

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