After two months, President Trump announced over the weekend that trade talks would resume with China.
Unfortunately, the restart of negotiations didn’t come without a price: The president agreed to hold off on the additional tariffs he threatened. In addition, he softened restrictions on Chinese technology giant Huawei, which the administration had only weeks before labeled a national security risk.
Some in the U.S. semiconductor field have been lobbying for a relaxation of the blanket ban on the company, so the turn of events will make them happy. But the Chinese will surely see this as a sign of accommodation and react accordingly.
There was a promise that China would begin to buy more agricultural goods, but we’re not sure where that will lead. The same promise was made when the president backed off the threats he made against Mexico some weeks ago — only to have Mexican authorities say no such promise existed.
We would note that we did not see much leaping for joy among agriculture interests at the promise of greater purchases.
We have said all along we are hopeful the Trump administration is successful in negotiations with China, even though we’ve known the odds of winning are long. After all, many of the practices that the world complains about are deeply embedded in China’s economy; there's a reason that other administrations have not been able to make progress in this area.
Still, Trump has made taking a hard line against China a signature policy.
Here in the Midwest, farmers have been willing to give the president leeway to pursue a deal. But it’s come at a price. Soybean exports between last July and April are down 27 percent, according to Reuters. Exports to China were down 81 percent during the same period. Then there is the worry that this disrupted trade relationship will end up turning permanent.
All this at a time when the weather has clobbered farmers.
The Trump administration has approved billions of dollars in emergency aid to farmers who are politically important in the 2020 election. But that, too, comes at a cost — and not just to the federal treasury. We worry this aid, seen by many on the left as merely a payoff to keep the president’s supporters from jumping ship, will end up fraying the consensus that the agriculture industry is a vital national interest worth supporting in times of bad weather or poor crop years.
We were hopeful in May that a deal might be in the offing, but now who knows?
Unfortunately, it has become clear to foreign leaders that President Trump's bark is much worse than his bite; he has a habit of making bombastic threats, only to back off under pressure.
The president seems content to let this already-protracted conflict play out, and while we prefer talks to stalemate, we realize this conflict also comes at a cost to the economy.
The Federal Reserve last month cited the trade war as one reason to consider lowering interest rates to shore up the economy. Meanwhile, manufacturing activity has slowed.
This is a concern in the Quad-Cities, where trade is a major part of our economy.
We are happy the talks between the world’s two biggest economies have resumed. On balance, that is a good thing. But we don’t think Americans should have a lot of hope that our trading relationship with the Chinese will be undergoing substantial change anytime soon. We can only hope that when this trade war has finally ended, the damage done to the U.S., and to rural America, will be limited.