Farmers took a big hit. Importers of auto parts, furniture and machinery choked down punishing tariffs. Investment between the world’s two largest economies dropped. Much of the U.S. economy is largely unscathed by two turbulent years of trade war with China, economic indicators show. Yet economic growth is trending near 2% in 2019, well short of the Trump administration’s goal of 3%.
The U.S. and China are preparing to sign a first-stage trade accord on Wednesday, easing trade tensions and making the tariffs worth it, in the administration’s view. The deal “protects American innovation and creates a level playing field for our great farmers, ranchers, manufacturers, and entrepreneurs,” said Judd Deere, a White House spokesman, adding, “President Trump protected the American worker and fundamentally changed our relationship with China.”
At the same time, most Chinese imports are still subject to U.S. tariffs, and many trade issues remain the subject of sharp disagreement. “China is set to do little more than restore agricultural purchases and offer some nice words on financial services and intellectual property,” said Benn Steil, the director of international economics at the Council on Foreign Relations. “Trump could have had that two years ago without the tariff damage.” And economists warn it could take years for the full consequences to be realized.