Officials in Washington are losing patience with China, which continues to fail to meet its purchase commitments under the "Phase 1" trade deal signed during the Trump administration. Specifically, Beijing had promised to buy an extra $200B worth of U.S. agriculture, energy and manufactured products over 2017 levels (in the two years through the end of 2021). The concerns even go beyond the purchase agreements, according to U.S. Trade Representative Katherine Tai, and include China's state-centered industrial policy.

Trade data: Economists will get a fresh read of that information today, with the U.S. likely to report a record trade deficit of $83B for December. Be on the lookout for a specific number from China, though data through November showed that China's imports from the U.S. amounted to less than 60% of its pledges. The U.S. has meanwhile maintained tariffs on more than $300B of annual Chinese exports, but analysts differ to whether those are in fact leverage, or are hurting the U.S. more than China.

Remember, tariffs are mainly paid by American companies and consumers. Chinese exporters also haven't had to lower prices to keep their goods competitive, and in fact, have seen a boon from the pandemic as pent-up demand and savings saw a large appetite for Chinese-made goods. So what to do? Raising tariffs would be controversial at a time when the U.S. is seeing its highest inflation in decades, while cutting the duties would risk accusations that the administration is going soft on China ahead of mid-term election campaigns (hence, the duties have been "maintained").