US jeopardising Chinese trade talks?
September 17, 2018
With the news that President Donald Trump has advised aides to go ahead with additional tariffs on Chinese products, the possibility of a trade war truce suddenly seems more remote.
As Bloomberg reports, “the Chinese government is considering declining the offer of talks” due to Trump’s decision to proceed with the tariffs.
Subsequently, stocks in both Europe and Asia have plummeted as “optimism of talks fizzled.”
The on-going tensions between the two nations ignited earlier this year, when the USITC first imposed tariffs on a long list of Chinese products in April 2018, a manoeuvre designed to “eliminate several of China’s policies and practices” which included “theft of US intellectual property”.
These tariffs soon proved controversial, with the ISC and US business leaders voicing doubts and relations between the two countries swiftly souring.
Now it seems that future negotiations between the US and China will become “more difficult”, as the USA faces “a lack of confidence that any deal will be honoured.”
“The two sides are still lacking trust,” said Raymond Yeung, chief greater China economist for Australia & New Zealand Banking Group Ltd. in Hong Kong. “China sees the U.S.’s action following Liu He’s visit in May as dishonourable,” he added, commenting that “Trump’s tariff threat only rubs salt into the wound.”
Officials from China and the US have met for talks four times in recent months, with the Chinese foreign ministry “repeatedly” calling for talks which would foster “equality and good faith”.
“Given divided trade policy preferences within the administration and continued news flow that hints at President Trump’s preference for tariffs, it remains unclear if potential high-level talks will yield any meaningful results,” states a research note from Nomura Holdings Inc. economists in the U.S. “We see increasingly fewer reasons for the Trump administration to divert from the gradual trajectory towards more protectionism, especially on China.”
As for China itself, the country has indicated that it could impose its own hefty tariffs on thousands of US items if Trump goes ahead with his threat.
“If one party does not honour its words, talks cannot succeed,” Vice Minister Wang had stated in July. For negotiations to succeed, “no party should point a gun at the other party,” he said.
Categories : City News
