China may never catch up to buying the agreed amounts of U.S. goods and services under the “phase one” trade deal, an expert said on Friday.
Both countries signed the agreement in January, which brought to a pause the trade war between them that saw retaliatory tariffs being slapped on goods worth hundreds of billions of dollars. Among other things, China committed to buying, over two years, at least $200 billion more U.S. goods and services in addition to its 2017 purchases.
But China has fallen short so far, noted Scott Kennedy, senior advisor and Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies.
“If it’s really based on the genuine commitments that they inked in January, they’re far behind and they’re never gonna catch up,” he told CNBC’s “Squawk Box Asia.”
Data compiled by Peterson Institute for International Economics found that in the first half of 2020, China bought less than a quarter of the targeted full-year amount of U.S. goods under the trade deal. The data doesn’t include U.S. services purchased by China because those are not reported on a monthly basis, said PIIE.
Top trade negotiators from both countries will reportedly meet via video conference this week to review the progress of implementing the phase one agreement.
The meeting comes as relations between the U.S. and China have worsened in recent months. Their disagreement now covers a wider range of issues, including the origin of the coronavirus, Hong Kong’s autonomy and national security concerns around Chinese tech companies.
U.S. President Donald Trump alluded to the broader issues surrounding his country’s relationship with China, saying earlier this week that the phase one trade deal “means very little in the overall import of things.”
Kennedy said the U.S.-China dispute has morphed from one about trade imbalances into a “fundamental strategic competition” in which both countries are “portraying the other as an existential threat.”
Still, he said the White House would not want to “junk” the deal because “it’s the only reason the Chinese are buying agricultural goods from farmers in red states that the president needs for reelection.”