Trump's China Dilemma: Time for less talk and more smart action.

• Author: Scissors, Derek

President Trump should stop talking about China and act. First-quarter trade numbers show his "phase one" deal is a non-starter for 2020, not to mention dwarfed by Covid-19. The president's elevation of selling more to China above everything else has frozen his administration and the congressional leadership of both parties. Those serious about changing the U.S.-China relationship have many other options. The United States reported March goods exports to China--the first full month where phase one applies--as 25 percent lower than March 2019. The reason seems obvious, but China claimed its March imports were basically flat. The United States fell far short when it should have outperformed China's other partners.

Breakdowns for specific products aren't available yet on our side. China reported a surge in farm imports from the United States, though from a very small base. Its energy imports from the United States were nearly non-existent in the first quarter. Global overcapacity and Covid-19's disruption mean American manufacturing and services exports to China are unlikely to get anywhere near 2020 targets.

The phase one deal was a questionable response to China's predatory economic behavior. It's no response at all to Covid-19 or China's ensuing predatory diplomatic behavior. There are much better policies (and some no better):

* Abandoning phase one is a necessary step but will have little impact, since there probably won't be much to abandon. Congress was not allowed to ratify it and the decision is entirely in President Trump's hands. Clinching phase one was a top reason for imposing tariffs. Without it...

* More tariffs won't help. In 2019, U.S. goods and services imports from China fell $87 billion. It's early, but 2020 imports from China are currently on pace to fall more than $100 billion without any further tariffs. This is one reason not to obsess over the trade deficit--it's automatically lower when the economy is weaker.

If imports do fall another $100 billion, it will hurt China more than the United States, because we can find substitute supply easier than they can find substitute demand. But $100 billion is less than 4 percent of what we'll spend on Covid-19 this year. If China's held responsible for 4 percent, who's responsible for the rest? Tariffs won't help the economy or help the president politically.

* Canceling the part of our national debt held by the PRC won't work and would be a bad idea if did. It won't work because...