China US Trade

FILE - In this July 18, 2019, file photo, shipping containers are loaded onto a cargo ship at a port in Nantong in eastern China's Jiangsu province. Beijing appealed to Washington on Wednesday, Aug. 21, to "meet China halfway" and end a tariff war after President Donald Trump said Americans might need to endure economic pain to achieve longer-term benefits. (Chinatopix via AP)

It was welcome news that a looming escalation of President Trump’s trade war with China, which could seriously damage South Carolina industry and agriculture, may have been averted Monday. China’s top trade negotiator declared the threatened increase in reciprocal tariffs was not beneficial for China and that his country resolutely opposed escalation of the conflict, which should be resolved “through calm negotiations.”

President Trump rightly hailed the promising announcement from Vice Premier Liu He. “They want to make a deal. That’s a great thing.”

The hopeful comments come after tit-for-tat tariff moves over the weekend that would have severely hurt South Carolina automobile exports to China by BMW and Volvo and their suppliers, the Port of Charleston and soybean prices nationwide.

President Trump began to apply punitive tariffs to Chinese imports last year, leading to retaliatory measures from China. China targeted exports from states that had voted for Mr. Trump in 2016, an obvious effort to put political pressure on Mr. Trump.

Now China has apparently reconsidered the likely success of its response to Mr. Trump’s demands for a more level playing field.

One possible explanation is that Mr. Trump’s supporters have remained loyal even in states hurt by China’s tariffs, so he is not likely to face a serious primary challenge in 2020. And some Democratic front-runners have implicitly backed a get-tough-with-China approach to trade.

A careful look by the Asia Society’s China Dashboard finds structural weaknesses made worse by short-term stimulus measures and backsliding from reforms promised by President Xi Jinping in 2013. As a result, “Foreign investors remain hesitant about China.” The trade war only intensifies concerns about China’s economic policies.

President Xi previously acknowledged that China had “anti-competitive, market-distorting, unreasonable subsidies, regulations and practices,” which he promised to remove. These unfair tactics are precisely what Mr. Trump wants to change.

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A reasonable agreement would seek to help China with economic and trade reform with small steps toward major change reinforced by safeguards against further backsliding.

They also might include measures to reduce the U.S.-China trade imbalance significantly so that Mr. Trump can claim a victory, but those measures would only be temporary window dressing unless China commits to a path of reform.

To achieve a Chinese commitment to a change of direction, the United States needs the support of the rest of the world trading community, especially that of the European Union, which may be tempted by Chinese offers of a trade deal that excludes the U.S.

Mr. Trump has picked a quarrel with the EU over its discriminatory tariffs on U.S. goods. Important as that issue is, it pales in significance to the challenge of China to the world trade system. Mr. Trump must do a better job of wooing European leaders.

Meanwhile, the trade dispute is far from settled and the economic storm warning for South Carolina remains in effect. Sen. Lindsey Graham, R-S.C., said Sunday that American consumers and businesses should “accept the pain that comes with standing up to China.” China must stop its unfair practices, but the question is how long will that pain last?