For a quarter century, Washington sent its sharpest economic minds to convince Beijing that China should consume more and export less. US Trade Representative Jamieson Greer has a succinct verdict on that entire project: it didn’t work.
“We did that for 25 years with our best people, and everything got worse,” Greer told Axios, referring to the bipartisan consensus that once held China could be nudged toward a consumption-driven economy. The implication is clear. The US has mostly stopped trying.
From persuasion to pragmatism
The shift represents one of the most significant US trade policy pivots in recent memory. Rather than attempting to fundamentally reshape China’s economic architecture, the Trump administration is pursuing what amounts to managed trade: specific, transactional deals with measurable deliverables.
The centerpiece of this new approach is a US-China Board of Trade, established to identify roughly $30 billion in goods from each side that could qualify for tariff reductions on non-sensitive products.
One early deliverable is soybeans. China committed to purchasing 25 million metric tons of US soybeans annually through the end of Trump’s term. By mid-August, Beijing had purchased between 4 and 5 million metric tons, a pace that suggests the commitment is being taken seriously even if the finish line is still distant.
Meanwhile, average tariff rates on Chinese goods remain in the neighborhood of 55%, a level the administration appears comfortable maintaining. The strategy isn’t to escalate further. It’s to hold the line while extracting concessions on agricultural exports, aircraft sales, and other sectors where the US holds leverage.
Why systemic reform was always a long shot
Greer’s admission reflects something trade economists have debated for years. China’s export-heavy model isn’t a policy quirk that can be adjusted with the right PowerPoint presentation at a bilateral summit. It’s deeply embedded in the country’s political structure.
State-directed investment in manufacturing capacity, suppressed domestic consumption relative to GDP, and currency management are features of the system, not bugs. Previous administrations treated them as correctable market distortions. The current administration treats them as a permanent feature of the landscape that needs to be navigated rather than removed.
What managed trade means for markets
Elevated tariffs at the 55% level create persistent inflationary pressure across supply chains. Companies that import Chinese components or finished goods continue to face cost structures that are dramatically higher than the pre-trade-war era.
Agriculture stands to benefit most directly. The soybean commitment alone, if fully honored, would represent a significant floor under US farm revenues. Aircraft manufacturers and other sectors explicitly mentioned in USTR discussions could see similar tailwinds as the Board of Trade identifies specific goods for tariff relief.
Recent USTR activity, including meetings with China’s ambassador and groundwork for potential future summits, suggests the administration is treating this as an ongoing negotiation rather than a static position. Any movement on the $30 billion tariff relief target, or any failure to meet soybean purchase commitments, could ripple through markets sensitive to trade policy signals.
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