“This was a deal that was negotiated over a long period of time,” Steve Mnuchin explained, when asked if China will keep to its promise of buying $250 billion in U.S. (farm) goods. “It was signed off by President Xi [Jinping] and President [Donald] Trump, and, and I have every reason to expect that they honor this agreement.”
For China, trade is a one-way street. All the goodies for them, and as little as possible for the capitalist nations they exploit. Even when that regime agrees to a pact, they usually find some way to ignore their part of the deal.
You might expect that pro-China officials here might be hoodwinked, but how could it happen to Beijing-blaster President Donald Trump?
Mnuchin, former Treasury Secretary, once big shot at Goldman Sachs and One West Bank, was the brains behind the China Phase One trade deal, pushing out other officials so he could better serve Wall Street interests.
The ex-hedge fund guru knew that China would be a great opportunity for America’s banking class, which already accounted for some 40% of the U.S. GDP, mostly by just pushing computer keys and using other folks’ money to trade and invest.
Mnuchin proposed that U.S. financial firms should be allowed to expand China operations, so they could raise more capital for that nation’s expansion. Nobody asked if this was to develop China’s car plants – which produce 2.5 times as many vehicles as this country – or was the money destined for more bombers, tanks, atomic bombs and aircraft carriers?
Big money doesn’t usually concern itself with whether or not it finances our enemies. Just like pre-WW2 Germany, financial support of dictators and future foes is “just business.”
China won the prize in the Mnuchin deal. We were promised the Communist bulwark would buy bargain bushels of wheat and soy beans from us to the tune of $250 billion, while we would boost their economy with credit cards and so-called financial instruments.
For those who study history, this will remind them of colony India sending raw materials to England, while India bought the “mother country’s” expensive manufactured goods in exchange.
We received the bad end of the trade deal, not just because of financing hostile China, but because the agreement would continue to destroy our manufacturing base and American jobs.
The only good news when the deal unveiled in 2019, it might help our farmers.
It didn’t. China has never lived up to its $250 billion promise.
Sending farm products to China for “fair trade” isn’t even possible now in many cases, since shippers won’t allow us to fill empty containers, already bound for China.
The reason given: food makes containers dirty. Folks in China would have to spend time cleaning containers, before packing them with laptops, smart phones and televisions headed back to our local big box outlet.
“One of our biggest exports to China has long been empty shipping containers. The dream of domestic US businesses growing market share by exporting to China is obviously one that is not shared by Beijing,” Michael Stumo, CEO of Coalition for a Prosperous America (CPA), explained:
Now we have shipping companies helping China by prohibiting containers from being filled with US agricultural goods, an important part of the US economy and to our post-pandemic recovery.
Perhaps what we need is a new rule that no containers from China may enter without being filled on the back-haul with US goods bought by them.
“The problem serves as an example of transnational, corporate interests being at total odds from US economic policy – whether it is Trump’s re-shoring push and Phase One trade deal that boosted agriculture, or Biden’s Build Back Better plans,” according to Kenneth Rapoza, CPA Industry Analyst
The complaints from agricultural exporters to the Federal Maritime Commission (FMC) began in October, last year, during the harvest season. Bob Sinner, president of SB&B Foods, said that food exporters were unable to book containers.
That’s because exporters can charge “five to six times more” by bringing Chinese goods to the US than sending agricultural exports to Asia, Sinner said. His company has requested containers on vessels as much as eight weeks in advance, but carriers said they were booked solid.
CPA reported that “proprietary US Census Bureau data shows carriers rejected as many as 177,938 containers known in October and November.”
The vast majority of the empty containers were leaving Long Beach and Los Angeles, and New Jersey and New York. Data showed that a high volume of empty containers were leaving US docks to be shipped to Asia, mainly China, to then be used for exports, CPA said.
CNBC’s trade reporter Lori Ann LaRocco said recently that by mid-October, carriers had notified agricultural exporters that “they would prioritize empty export containers over agricultural exports. They also said they would increase prices on agricultural exports if the commodities were transported.”
This suits China, which holds the upper hand in the container dispute. They could have ordered the carriers to comply with the trade deal goals – if they really wanted to keep their bargain with the United States and Trump.
One thing is certain – The Art of the Deal could use some serious revision.