Illustration: Luo Xuan/GT

China is not Mexico. It's impossible that the US can strike a trade deal with China by forcing Beijing to make big compromises, as the US did to Mexico when it came to the US-Mexico-Canada Agreement (USMCA).

US President Donald Trump on Tuesday retweeted a post from US Representative Mike Kelly, who claimed that the USMCA is "a big win." The Financial Times said Trump's "disruptive approach to trade" is delivering results at a time of heightened commercial tensions with China and the EU. Some have linked the USMCA to the ongoing trade row with China, and they hope the new North American deal can be used as a model to pressure Beijing to accept US trade policy.

The USMCA requires 40-45 percent of auto content to be made by workers earning at least $16 an hour. The rule is likely to boost manufacturing in the US, where wages are higher than in Mexico. According to Mexico News Daily, just 0.5 percent of 53.8 million workers in Mexico earn $16 or more per hour. The deal casts a cloud over the auto industry in Mexico.

Why did Mexico accept a deal that may hit its auto industry? Mexico's economy is highly dependent on the US. Some statistics showed about 80 percent of Mexico's exports went to the US in 2018. This may show why the US can force Mexico to make compromises in trade talks. 

The same scenario won't play out in the trade talks between Beijing and Washington. China's exports to the US account for 19 percent of its total exports of goods, far below the 80 percent recorded by Mexico. More importantly, China has a huge domestic market that can help offset the negative effects of the trade war as some Chinese exporters lose market share in the US. It's very unlikely for Beijing to make compromises in trade talks with the US in the way that Mexico did.

Trump has remade the landscape of US trade policy since he came into office. The USMCA, which was touted by Trump as the best and most important trade deal ever made by the US, offers a window on his thinking about global trade. The deal requires 75 percent of auto content to be made in North America. The rule may exert an effect on not only Mexico but also China. Mexico is an important export destination of made-in-China auto content. The USMCA is likely to hit China's auto sector and have an impact on the global manufacturing chain.

However, Trump can't totally reshape the global industrial chain through his protectionist measures and "disruptive approach to trade." Whether or not China and the US can reach a trade deal, the bilateral trade game is likely to continue. China will fight to the end to defend its interests and support free trade.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn