On Tuesday, President Obama announced a $3 billion subsidy program to support shipping in the Pacific Rim to offset the costs of the economic sanctions against China imposed on that country.
The program will include a $1.1 billion allocation for commercial cargo shipments, which Obama also said will be used to offset shipping costs from the Asia-Pacific Economic Cooperation (APEC) meeting in Beijing.
Obama’s program is aimed at easing pressure on Chinese companies that have been forced to scale back their international operations.
But the administration’s announcement raises the question of whether the program will actually encourage more shipping to China, a country that has been increasingly dependent on the shipping trade with the United States.
The Chinese government has made clear that it wants to limit the trade between the United Kingdom and the United Arab Emirates, which have also signed trade deals with China.
“The administration is signaling that they’re going to try to limit imports of certain products to the U.S. from China,” Michael T. McCaul, the former Republican Texas congressman who heads the Senate Homeland Security and Governmental Affairs Committee, told Bloomberg.
“It’s really a little bit of a gamble.
But I do think it’s a very, very smart move.”
In addition to the commercial cargo subsidy, Obama has also announced that he’s supporting an agreement between the Chinese government and the country’s oil giant, CNOOC, to allow U. S. ships to dock at the CNOOS Caspian Sea port of Qingdao.
But China’s Ministry of Commerce, the Chinese equivalent of the Commerce Department, has rejected the agreement, arguing that the U of A’s move will create new obstacles to China’s trade with other nations.
“If we don’t cooperate with the U S, it will lead to a further loss of trade and a further deterioration of the situation,” said CNOO vice president Liu Xiaoguang during a press conference on Monday.
CNOOA, a Chinese state-owned oil company, was the first foreign company to bid for a Chinese shipyard, and is already the world’s third-largest shipbuilder after Norway and Germany.
It recently purchased a third of CNOCO’s Caspia oilfield.
China’s government has been trying to expand its oil and gas production in the region since 2013.
In September, China said it would spend $1 billion to upgrade the countrys oil and natural gas pipeline network.
But analysts say China’s growing dependence on its energy sector is leading to a loss of U. States exports to China.
The U.K. and the Netherlands have signed trade agreements with China in recent years, but the Obama Administration has refused to support those deals, which critics argue threaten U.N. sanctions against Beijing over its human rights record and economic policies.
The United States has a history of backing the free market, but also has strong ties to China in general.
Under President Bill Clinton, the United State exported $8.6 billion worth of goods to the country annually, which was nearly 20 times the U and UK combined exports, according to the American Council on Foreign Relations.
During the Obama Presidency, the U:s trade deficit with China reached $4.3 trillion, a nearly 20 percent increase over the Clinton Administration.
“We’re seeing that the United Sates exports to the rest of the world are declining.
It’s not just to China,” said Kevin Smith, the director of the Center for Strategic and International Studies, who is also a former Republican congressman.
“That is a concern for the Obama regime, and it’s going to be a concern of the next president.
There’s no doubt the Obama White House is going to continue to make the case that this is a free trade deal, but it is a trade deal that will be a disaster for U.s. exports.”