David Henderson (like the Editorial Board of the Wall Street Journal) rightly applauds Sen. Ron Johnson (R-WI) for his defense of the right of a Wisconsin-based company to produce some products in South Carolina.
Managed trade has failed once again.
The so-called “phase one” trade deal inked in December 2019 by former President Donald Trump and Chinese President Xi Jinping might have put an end to the spiraling trade war between the two countries, but the agreement did not result in China buying more American goods, as both leaders promised it would. In fact, during the two years covered by the deal, China imported fewer American goods than before the trade war began—meaning that the deal did not even succeed at patching up the damage caused by Trump’s bellicose trade policies.
“After two years of escalating tariffs and rhetoric about economic decoupling, the deal did little to reduce the uncertainty discouraging the business investment needed to restart U.S. exports,” writes Chad Bown, a senior fellow at the Peterson Institute for International Economics, a pro-trade think tank.
For two years, Bown has been tracking the promises made by both countries in what Trump called the “phase one” deal—there never was a phase two—as it has become increasingly apparent that those goals would not be met. In his final analysis of the two-year agreement, which expired on December 31, Bown concludes that “China bought only 57 percent” of what it had promised, not even enough to reach pre-trade-war levels.