There will be little progress on the phase one trade deal before the U.S. presidential election in November, former U.S. Ambassador to China Max Baucus said Tuesday.
President Donald Trump signed the partial trade agreement with Beijing in January, but the coronavirus pandemic since then has affected China’s economy. There are now doubts about whether the Asian giant will be able to meet its commitments with the large purchases agreed in the agreement.
These “odds are decreasing,” said Baucus, who served as ambassador to China from February 2014 to January 2017, under the administration of former President Barack Obama.
According to a forecast by the think tank of the Center for Strategic and International Studies, the pandemic is likely to make China’s purchases of US goods this year much lower than agreed in the phase one trade deal.
With Trump concerned about securing a second term and China struggling to meet his end of the deal, there will be little constructive development until after the election, Baucus told CNBC’s “Squawk Box”.
“There will be a lot of round-trip rhetoric, but I don’t know if there will be many significant and substantive agreements for change,” he said.
The former ambassador described relations between the United States and China as a “great gulf” and added that more talks are required between the two sides.
Tensions will continue even if Biden wins the election
Regarding the upcoming presidential election, Baucus said the United States’ relationship with China could improve if former Vice President Joe Biden wins the election, but tensions will continue.
“It’s probably not going to get worse, maybe it will hit bottom here,” Baucus said of a Biden victory.
It can also improve, since Biden is “much more predictable” and is expected to use regular diplomatic channels and practice silent diplomacy, he explained.
“He knows that to reach agreements with countries, you do not have to criticize them. You cannot force them to dig publicly on their heels, you have to negotiate,” he said.
But there will continue to be signs of tension between the United States and China, and the Asian country is now a rising power, he said.
“It does not mean that there will not be significant tension between the United States and China. There will be, and will continue to exist, (tensions) even with a Biden presidency,” Baucus said.
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