Wednesday promises to be a one for the record books for President Donald Trump. In Congress, Speaker of the House Nancy Pelosi will lead a vote on selecting trial managers for the president’s impeachment, then she will formally lead a procession to the Senate chambers to present the charges. Trump will be the third president impeached in U.S. history, as Nixon resigned before his impeachment could take place.
Just down the street, President Trump will sign Phase 1 of a new trade arrangement with China, which comes after almost two years of trade sanctions put in place by Trump to bring the Chinese to the negotiating table. Along the way he has put tariffs on more than $300 billion worth of goods and strongly encouraged companies to find source countries other than the Middle Kingdom.
Phase 1 won’t reduce tariffs in place, but the agreement in principle in the middle of December did stop Trump from putting tariffs on the last $160 billion or so of consumer goods that come from China. The deal calls for China to improve intellectual property protections, to stop requiring U.S. firms to share their technology as a cost of doing business in the country, and for China to buy an additional $200 billion worth of U.S. goods and services over the next two years over 2017 levels. That would represent an increase of more than 50%.
It’s hard to see how China will increase its purchases by such a large amount with its domestic economy slowing down. The most obvious way would be to shift some of what it purchases from other countries to the U.S., which should make its other trading partners very nervous.
Because China has often failed to live up to such agreements, Phase 1 includes enforcement mechanisms that allow President Trump to slap on more tariffs.
Both the impeachment and trade deal could be something of a let down. While the Senate is required to take up the articles of impeachment within just a few days, after opening statements it could vote on summary judgment for dismissal. Even if it drags on, it’s hard to see how the Senate, with 53 Republicans, comes up with 67 votes to impeach Trump.
On the Trade deal, without sanctions rolling off the main beneficiaries will be farmers. That’s great news for the Midwest and much needed relief, but it doesn’t mean the U.S. economy will suddenly jump to a higher level of growth.