President Donald J. Trump has proven that his desire to ‘Make America Great Again’ is more than just a campaign slogan. China, which possesses one of the fastest growing economies in the world, has a reputation for “using” the United States to gain financial and technological advantages. Trump’s recent visit to China was aimed at taking a tougher stance on U.S.-Chinese trade relations, which he described as “very one-sided and unfair.” Trump came away with $250 billion in new trade deals, a pretty astonishing accomplishment for a President who has been in office for less than a year.
According to census.gov, China ranks as a top trade partner with the United States. However, it’s not all good news as the U.S. has a huge trade deficit with China, estimated at $347 billion in 2016. The deficit exists due to the large number of imports from China to the U.S. and fewer exports from the U.S. to China. A substantial number U.S. imports to China are in the form of raw materials. China provides cheap labor to assemble products and ship them back to the U.S. as imports. China’s cheap manufacturing capability has taken American jobs. A game of tug of war to bring jobs back home by imposing trade tariffs is constantly being discussed by politicians. Trump has publicly shared that he does not fault China for taking advantage of the United States for the benefit of its own citizens. Instead, Trump criticizes his predecessors for making bad business deals that have continually provided disadvantages for American businesses and workers.
President Trump’s proactive role and superior negotiating skills have brought the issues of fairness in trade to the table. The President’s productive visit with Chinese President Xi Jinping has brought a turn-about trade that is lucrative for the United States. Resulting from negotiations, the duo announced more than $250 billion in deals between the two countries that will affect many industries. Meanwhile, critics of Trump suggest that the non-binding deals could fall apart at any given time. Still, there is much optimism as to what can occur in the future. In the dealings discussed, China could put more than $100 billion into U.S. energy projects in upcoming years. China Energy Investment Corporation Limited plans to invest $83.7 billion in shale gas and chemical manufacturing in West Virginia. Talks also include China’s investment of over $40 billion in Alaska’s energy sector through a joint venture between Sinopec, China’s Petroleum & Chemical Corporation, and the Alaskan government. That agreement is likely to produce the economic bonus of approximately 12,000 jobs.
Here are some other companies likely to profit from the new deals with China:
- Boeing – reached a $37 billion agreement to sell 300 planes to China.
- Caterpillar – reached a five-year agreement with China Energy investment for mining equipment sales and rentals, and for product support and technology.
- General Electric – reached three deals with Chinese companies totaling $3.5 billion.
- Qualcomm – inked $12 billion in non-binding deals to supply components to Chinese smartphone brands Xiaomi, Vivo, and Oppo.
- Ford – and its Chinese Partner, Anhui Zotye Automobile, will invest $756 million to build electric cars.
- Goldman Sachs – along with China Investment Corp., the companies will create an industrial cooperation fund to target $5 billion in commitments to invest in U.S. companies in sectors such as manufacturing and healthcare that do business in or with China.
- The American soybean industry – Chinese importers plan to buy $5 billion worth of soybeans through 2018.
- Honeywell – Oriental Energy will use Honeywell to help convert propane into propylene. Spring Airlines will use Honeywell’s technologies.
- Dow Chemical – and Shanghai-based bike sharing company, Mobike, signed a memorandum of understanding to create light-weight bikes.
- Food product companies such as: Smithfield Foods (pork) & Montana (beef) – Chinese e-commerce company, JD.com, plans to purchase $2 billion in U.S. agriculture and food products over the next three years.
- Bell Helicopter – Textron’s Bell Helicopters will sell 50 Bell helicopters to Reignwood International for resale in China.
- Air Products – signed an agreement with Yankuang Group Co., Ltd to build a coal-to-synthesis (syngas) production facility in China.