According to author and China expert Gordon Chang, a potential trade deal between the U.S. and China is possible, but probably won’t happen quickly.
Chang said that China is resistant to fundamental economic reforms.
“There very well could be a deal, but I think it's going to take quite some time. We've had a trade deal with China, many of them,” Chang, author of “The Coming Collapse of China,” told Newsmax.
Treasury Secretary Scott Bessent has been “talking about a deal that will rebalance the Chinese economy. That means structural change. [Chinese President] Xi Jinping has been adamantly opposed to structural change of the Chinese economy,” Chang continued.
Chang said China may not follow a deal even if it is reached, citing the 2020 phase one trade agreement, which required China to buy more American goods, as an example.
“All it had to do was to meet certain targets on the purchase of American commodities and manufactured goods, and they failed to meet their obligations under that one as well. I don't know how we can get China to honor a trade deal,” Chang said.
China said on Friday that it is evaluating an offer from the U.S. to hold talks over President Trump’s tariffs, which consist of 145% on Chinese imports. China implemented 125% in retaliatory measures.
“First of all, we see these large investments by foreign companies. And the most important one Trump announced was TSMC, the Taiwan semiconductor manufacturing business. That actually is the biggest investment in the U.S....$165 billion in total. This is the type of manufacturing that we need,” Chang said.
Chang noted that economic trends, such as AI and automation, favor the U.S.. This may help bring smaller-scale manufacturing back home, especially with the pro-business tax policies Trump has been championing.
“If President Trump can keep the tax rates lower and if he can enact an investment tax credit, that would really help American manufacturers,” Chang said.
“There's enormous leverage that the United States has. Everything that China can do to retaliate hurts China as much or more than it does the United States,” Chang said. “There's only one card that Xi Jinping has to play, and that is to get President Trump to back down, to preemptively surrender. I don't think our president is going to do that, which means I think we're going to see China in a world of distress. Its economy is already failing...in a deflationary spiral downwards. So this is a very critical situation for the Chinese economy. Trump holds the high cards.”
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