'Let's see how this plays out': Heyman on U.S.-China trade pact
It may be too soon for U.S. President Donald Trump to unfurl the ‘mission: accomplished’ banner in his trade negotiations with China, according to a former American ambassador to Canada.
“China has had commitments in the past that they have not lived up to,” Bruce Heyman – who served as the U.S.’ envoy to Canada between 2014 and 2017 – told BNN Bloomberg in an interview Wednesday.
“I sit down and say: ‘Alright, let’s just see how this plays out.’ There’s some really bold numbers there with the regard to the amount of purchases that China is committed to, or supposedly committed to.”
The U.S. and China signed what Trump calls a ‘phase one’ trade deal in Washington on Wednesday that came with US$200 million in spending commitments from the Chinese covering everything from airliners to oil to seafood.
However, the deal does not immediately put an end to US$360 billion in tariffs slapped on Chinese imports to the States. Those levies are expected to remain in place until after the 2020 U.S. presidential election.
Heyman said those tariffs may have already done serious damage to America’s agricultural industry.
“Nobody really fully appreciates – or very few do - the damage done to the agricultural sector, because what ended up happening was China then moved purchases outside the (United States, especially to) Brazil, which expanded capacity,” he said.
“While demand may move around, pricing may not come back as quickly as maybe some of the farmers would like.”
Heyman added that while this deal largely quells the international trade uncertainty that had been worrying investors, the math still needs to balance out between the markets and corporate performance.
“I think we’re going to look more closely at economic delivery, reporting levels of companies, and the amount of profits,” he said. “Last year was a great year in the markets, but we really expanded valuations during the year. Corporate profits and GDP growth was nothing close to what we saw in the market improvement.“