Opinion

Europe may be playing spoiler to the elusive US-China trade deal

Chinese President Xi Jinping reacts during the signing of a memorandum of understanding on China’s Belt and Road Initiative in Rome, Italy, on March 23, 2019. Alessia Pierdomenico | Bloomberg | Getty Images

By Dr. Michael Ivanovitch for CNBC

Washington is announcing that has largely agreed on an enforcement mechanism with Beijing to monitor bilateral trade while China continues to accumulate soaring surpluses on its goods sales to the U.S.

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China’s customs records show that the country’s surplus with the U.S. rose 40 percent in March from the previous month to stand at $62.66 billion for the first quarter of this year.

That’s how China is responding to threats U.S. President Donald Trump issued during his election campaign — and repeatedly since — that he would put a stop to that. Speaking of China, Trump told a campaign rally on Staten Island, New York in April 2016 that “they’re ripping us off, folks.” He repeated the same view last September during a press conference in Warsaw, Poland.

Trump could say it again tomorrow without being contradicted by the data.

EU allies going their own ways
The trade statistics from the U.S. Commerce Department indicate that — on Trump’s watch — China pocketed a U.S. trade surplus of $829.3 billion between January 2017 and January 2019 (the latest U.S. data point available).

I believe that the Chinese are making a mistake by challenging the U.S. on such a sensitive issue. Granting that Washington may have gone too far in its attempts to control China’s economic policies, Beijing still could have – and should have – preempted all that by reducing its sales to the U.S. while stepping up purchases of American goods and services. That would have shown Beijing’s determination to substantially run down its excessive, and unsustainable, surpluses on U.S. trades.

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