The coronavirus crisis is set to make it “impossible” for Beijing to fulfill purchases agreed under the “phase one” trade deal with Washington, the Center for Strategic and International Studies said in its recent forecast.
The deal, hammered out between the world’s two biggest economies in January, forecasted a rise in goods exports of 36.6 percent this year. Instead, shipments of US goods to China dropped 10 percent year-on-year in the first three months of 2020, according to the think tank.
In its “worst-case scenario,” the research projects that China could import US goods worth just $60 billion – a shortfall of $129.6 billion from the level it was supposed to reach this year.
China agreed to boost purchases of US manufacturing, energy and agricultural goods and services by at least $200 billion over two years. The think tank initially warned that those goals were unlikely to be met, but the coronavirus outbreak “made the unrealistic the impossible.”
When the virus was mostly raging in China and Asia, taking a toll on the region’s economy, Washington refused to make any concessions to Beijing. Now the Trump administration has ramped up pressure on China, blaming it for the outbreak and threatening to impose new tariffs – in addition to those that were not lifted by the deal.
In midst of the trade war, Chinese direct investment into the US fell to its lowest level since the Great Recession, according to a report released by the National Committee on US-China Relations and the Rhodium Group consultancy. The negative trend worsened this year, as the first months saw only $200 million in newly announced direct investments, the report said, calling on the two states to work together as the pandemic weakens the global economy.
However, US President Donald Trump earlier signaled that even the current economic crisis would not stop him from escalating trade tensions with Beijing. On Friday, he said he was “very torn” about whether to terminate the first stage of the trade deal.
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