Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
U.S. President Donald Trump is running for re-election, in part, on the idea that his aggressive trade policy with China has been a boon to the United States.
“It’s probably the No. 1 reason I’m standing here, because of trade, and have we turned that around,” Trump said at a rally in Michigan on Tuesday. “I put big fat, beautiful tariffs on China. We took in tens of billions of dollars,” he said later. (In fact, the money the U.S. treasury took in from tariffs was paid by U.S. importers of Chinese goods.)
New data, however, suggests that the U.S. has so far failed to reap the full benefits of Trump’s signature trade deal with China. What’s more, the issue is not a top concern for U.S. voters.
The last tranche of U.S.-China trade data to publish before the 2020 U.S. presidential election on Nov. 3 shows that China is not on pace to meet the terms of the phase I trade deal the Trump administration signed ten months ago.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
In January, the U.S. and China took the first step to end a years-long trade war, with China agreeing to buy $200 billion more of U.S. goods in 2020 and 2021 in exchange for relaxed U.S. tariffs.
Through September, China had imported roughly 53% of what it should have bought to be on track to meet the deal’s 2020 targets, according to the Peterson Institute for International Economics’ (PIIE) trade deal tracker.
“The evidence indicates that the deal is failing to live up to Trump’s pledge,” senior fellow for PIIE Chad Bown wrote on Tuesday. “No single reason explains why China has not met the phase one goals. The COVID-19 pandemic did initially knock China’s economy on its heels, but its trade has recovered faster than most. And some U.S. exports to China—including medical supplies, pork, and semiconductors—actually accelerated in 2020.”
After the election, Bown wrote, “the United States needs a new approach to address its trade concerns with China.”
Importance to voters
The latest figures undercut Trump’s boasts about his record on trade, but even his inflated claims may not resonate with voters. Surveys show that trade policy ranks low when it comes to the issues voters care most about.
In a 2016 pre-election poll of registered voters, 57% of respondents said trade policy was ‘very important’ to their choice of presidential candidate, according to the Pew Research Center. Still, it ranked 11th on a list of 14 issues pollsters asked about. Likewise, a 2016 Gallup poll found that trade policy didn’t rank as one of the top 10 most important issues for Republicans, Independents, or Democrats in choosing a presidential candidate.
Again this year, trade policy is not a top concern for U.S. voters. In January 2020, a Gallup poll found that voters ranked the U.S.’s ‘trade policy with other nations’ 15th on a list of the 16 most important issues in the presidential election.
But in recent months, perhaps because of the pandemic, public support for a more aggressive U.S. trade relationship with Beijing seems to be growing, even if it isn’t top of mind at the ballot box.
In June 2020, Morning Consult found that 39% of voters believed that U.S. tariffs on Chinese exports would help the U.S. economy, while 38% said the tariffs would hurt it. In the same poll from May 2019, 36% of voters believed U.S. tariffs on Chinese exports would help the U.S. economy as opposed to 44% who said they would hurt the U.S.
Even though voters have more pressing concerns, Trump and Biden continue to relitigate Trump’s trade policies as they make their final appeals.
On CBS’s 60 Minutes, Biden blasted Trump for increasing the U.S.’s. deficit with China.
“We have a trade deficit that’s larger with China than when we were there,” Biden told 60 Minutes on Sunday, referring to the Obama presidency.
Biden made a similar claim in a September debate with Trump, and, as Fortune previously reported, it’s at least partly true. The U.S.’s trade deficit continued to balloon in Trump’s first few years in office but has since returned to roughly Obama-era levels.
Meanwhile, Trump said at the rally that if re-elected he will help the U.S. end its “reliance on China once and for all.”
In order to do so, the U.S. may need to start from square one in trade negotiations with China.
“[The phase I trade deal] did very little to tackle the major trade issues the United States has with China,” the PIIE’s Bown writes. “No matter who is president, the United States needs to get China to liberalize its tariffs, remove non-tariff barriers, and rationalize its subsidies and other practices that distort economic incentives.”
More must-read international coverage from Fortune:
- China’s GDP growth in Q3 offers little for other economies to emulate
- Big Chocolate’s child-labor problem is still far from fixed
- Impossible Foods enters grocery stores outside the U.S. for the first time
- Hong Kong has COVID-19 under control—it hasn’t helped its flagship airline
- U.K. drug trial will deliberately expose young people to the coronavirus, despite ethical concerns