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President Trump Declares The 'Phase One' Of Trade Deal With China Is 'Fully Intact'


President Trump declared on Twitter this week that his Phase 1 trade deal with China is, quote, "fully intact" despite friction between the two countries over the coronavirus. Trump says he hopes China lives up to its promise to buy more American goods. China has been buying more pork from the U.S. But so far, the country's purchases of other products are well below the target set in the trade deal. That could become a political liability for the president, as NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Like a lot of what comes out of Washington, the U.S.-China trade deal is loaded with pork. And if you're a hog farmer, that's a good thing. China promised to substantially increase its purchases of pork from the United States. And Veronica Nigh of the Farm Bureau Federation says U.S. pork shipments to China more than quadrupled in the first four months of this year.

VERONICA NIGH: In April of this year, the U.S. was the largest supplier to China. So we're getting a healthy amount.

HORSLEY: China has to buy more pork from abroad because many of its own hogs have been wiped out by African swine fever. Even though the U.S. sent the most pounds of pork, Spanish hog farmers got the biggest paychecks. That's because American farmers still face steep tariffs in China and have to sell their pork at a discount.

For other U.S. farmers, the returns on the trade deal are still up in the air. Nigh says soybean exports have increased from the depths of the trade war a year ago, but they're still running far below what China pledged to buy in the Phase 1 agreement.

NIGH: They're certainly going to have to speed up purchases and make some considerable purchases in the last quarter of the year.

HORSLEY: The coronavirus could also play havoc with the deal just as it has with the rest of the economy. In recent days, China stopped buying chicken from a Tyson plant in the U.S., where a lot of workers tested positive, even though there's no evidence the virus can be spread through food. Chris Rogers of S&P Global Market Intelligence says that could have ripple effects.

CHRIS ROGERS: This is, perhaps, a warning from the Chinese government to the U.S. that, hey, we can buy our products from wherever we want for whatever reasons we want.

HORSLEY: As part of the trade deal, China made an even bigger commitment to boost its purchases of manufactured goods from the U.S. Rogers says so far, Chinese companies aren't doing that.

ROGERS: One of the challenges in terms of manufactured goods is that they're bought by privately owned companies, not by the state. So the state can kind of incentivize companies to buy American, if you like. But, you know, that's by no means guaranteed.

HORSLEY: Exports of aircraft have been hampered by Boeing's ongoing problems with the 737 Max jet. And Tesla no longer has to export cars to China now that it's opened its own factory there.

All this casts doubt on whether the trade agreement will deliver the kind of economic lift the president promised when he signed the deal back in January. Former national security adviser John Bolton told Morning Edition this week Trump saw a political payoff if Midwestern farmers could increase their exports.


JOHN BOLTON: There was a clear linkage between increased Chinese purchases of American agricultural products and Trump's reelection by benefiting farmers in key agricultural states whose electoral votes he needed.

ROGERS: Those same farmers were hard hit by the president's trade war with China, which was supposed to deliver stronger protections for intellectual property and other big structural changes. This week, Democrats launched a campaign ad saying Trump's aggressive trade tactics have backfired.


UNIDENTIFIED PERSON: He didn't get tough. He got played. Trump lost a trade war that he started.

HORSLEY: The ad is running in battleground states with a lot of farms and factories, like Wisconsin, Michigan and Pennsylvania. While it's too early to assess the economic results of the trade deal, which runs through next year, the political results could be known in November.

Scott Horsley, NPR News, Washington.

(SOUNDBITE OF JAY SOM SONG, "BAYBEE") Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.