A new report out from the National Bureau of Asian Research warns the Trump Administration to temper its expectations on China significantly changing its economic policies.
The bureau says China can’t make deep structural reforms to its economy in the 10 days before the March 1 deadline to produce a trade deal. The report says the better strategy may be to keep tariffs on Chinese goods in place, potentially for years.
The bureau also wants the U.S. to work with allies like the European Union and Japan to crank up international reform pressure on Beijing. “We don’t think inflicting collateral damage on the U.S. economy is a good thing,” says former Louisiana Representative Charles Boustany, one of the co-authors of the report. “All we’re saying is hold the line for now on tariffs, short of any kind of major breakthrough.” The report’s authors say a good idea in the interim is to work on what they call “interim agreements.” An example would be the Chinese lifting tariffs on U.S. farm goods in exchange for Trump removing tariffs on Chinese electronic goods.