On "Forbes Newsroom," author and U.S.-China relations expert Gordon Chang discussed non-tariff barriers in U.S. international trade.
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00:00Treasury Secretary Besant reportedly told investors on Tuesday that we're at an unsustainable point with China.
00:06And China said last week that the latest tariff hike, I believe it was at 145%, was a, quote, meaningless tariff numbers game.
00:14And just this morning, the Wall Street Journal reported that the tariffs would be slashed almost in half, between 50 to 65%.
00:21So even let's say that was slashed that much, which, like we said, the White House was just mulling it over, according to that report.
00:29Does that turn trading back on or is it still too high?
00:32I mean, what would be the number that would bring the United States and China away from that cliff?
00:38I think we probably need to go to single digits.
00:41But it's really not so much tariffs that are going to be the issue with China.
00:46Like with Japan and like with a lot of other countries, these are the non-tariff barriers that are the more important.
00:51And President Trump has talked about non-tariff barriers with regard to various countries as being critical and crucial for his trade negotiations.
01:02So this is a very it's not just a question of what their tariff rates are going to be.
01:07It's going to be a question of will President Trump be able to get fundamental structural change in the Chinese economy?
01:15The alternative, Brittany, is not a deal on the structure of the Chinese economy, but really is purchase commitments on the part of the Chinese to buy so much grain, so many soybeans, so many products.
01:28They tried that in the phase one trade deal of January 2020.
01:32Beijing met only 58% of its commitments, which means it really didn't buy much more than it did in the baseline period.
01:40So we've tried that approach as well.
01:43That should be easy.
01:45But unfortunately, that didn't work either.
01:47So the question is, in my mind, is if neither of those approaches have worked and we've seen failed agreements for decades, the question is, what will work?