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Published -
- July 30, 2019
- 12:34 pm
Does China really want a trade deal?
Former White House Trade Official Clete Willems on the Trump administration’s trade negotiations with China, the future of USMCA, Sen. Elizabeth Warren unveiling her trade plan and the 2020 presidential race.
What triggered the trade war between the US and China?
Introduction
Trade has always been an important aspect of global economy and the United States and China are the two biggest economic powers of the world. The trade war between the two countries started almost two years back when the US imposed tariffs on Chinese goods in order to reduce their trade deficit. However, the situation has not improved and there is ongoing high level trade talks between the two countries. In this article, we will analyze whether China really wants a trade deal with the United States or not.
Current Situation
The ongoing trade war between the US and China has taken a toll on both economies. The US has imposed tariffs on Chinese goods worth more than $360 billion, and China has responded with tariffs on US goods worth more than $110 billion. The US has been demanding China to reduce its trade deficit, transfer technology and also ensure that Intellectual Property Rights are well protected. However, China has so far been unwilling to agree to these demands.
China’s Stance
China has always maintained that it is willing to negotiate and reach a deal with the US. However, they have also made it clear that they will not compromise on their national interests. China has offered to increase imports from the US, reduce tariffs on US products and also improve Intellectual Property Rights protection. However, they have shown their displeasure on the US approach of imposing tariffs and also the US government’s attitude towards Huawei.
The US Stance
The US has been demanding that China should address the issues related to Intellectual Property theft, forced technology transfers, and reduce barriers to trade such as subsidies to its state-owned enterprises. The US has been adamant about reducing its trade deficit with China, which stood at around $420 billion in 2018. However, the US has also shown its willingness to reduce the tariff rates and increase exports to China.
Prospects
The trade talks have been going on for a long time, but a resolution seems difficult to reach. Both the countries have been showing signs of compromise, however, the long-standing issues have yet to be resolved. With the US Presidential Elections less than a year away, President Trump would be keen on getting a deal done with China to bolster his re-election prospects. With China focusing on its economic growth, it would also be beneficial for them to reach a deal with the US.
Conclusion
In conclusion, China and the US both have a lot to gain from a trade deal. However, both the countries have their vested interests at stake, making it a difficult problem to resolve. The ongoing trade talks suggest that both the countries are open to negotiations, but it will be a long road ahead to reach a deal. It is important for both the US and China to reach a trade deal, not just for their economies but also for a stable world economic order, as both the economies are intertwined and have an impact on the world economy. As such, it is vital for both the US and China to maintain cordial relations and resolve the ongoing trade issues amicably.
