The Phase One trade deal is on borrowed time

Next week’s semi-annual review of the Phase One trade deal will likely be a sobering affair given China’s limited progress toward meeting its purchase commitments. While both sides appear content to stick with the deal for now, the original political motivations for signing the deal are fading and it seems unlikely that it will survive the intensifying trend of US-China decoupling. Rising trade tensions are one reason to expect the recent under-performance of the renminbi to continue in the coming months.