Bessent and Greer are scheduled to meet with Chinese officials in a few days to discuss trade issues. What can we expect?
Here are my thoughts:
- Since Trump and Xi will not attend, geopolitical issues will be off the table. In the end, they probably won’t be.
- China is a truly mercantilist country. It is possible to make a managed trade agreement with it.
- There is no possibility that the Chinese will agree to abandon its economic model just to maintain its level of exports to the US.
- It is, however, possible to reach an agreement in which the Chinese buy more American gas and agricultural products. This agreement would look a lot like the one that Trump negotiated during his first term.
- The Chinese did not meet their obligations under the first agreement.
- Even if they did, increased profits for farmers and gas companies would hardly represent an American industrial renaissance or bring about the Godly Society. It would not be worth the chaos and the pain of the trade war to the average American.