A protracted battle: can Washington and Beijing end the trade war

A protracted battle: can Washington and Beijing end the trade war

In the near future, China and the United States are unlikely to be able to stop the trade war between them, experts say. So they reacted to the results of the talks between Donald Trump and Vice Prime Minister Liu He. After the meeting, the American leader said that in three to five weeks a “first stage agreement” could be signed between the countries that would affect the export of agricultural products from the United States, as well as the protection of intellectual property and the financial sector. Analysts believe Beijing took a wait-and-see attitude because Trump could lose the election 2019 of the year, and he will be replaced by a Democratic president who will seek to end the trade war.

Beijing and Washington are unlikely to reach a compromise on trade differences in the near future, experts say. According to them, it will be difficult for countries to come to a common point of view on such fundamental issues as technology transfer and currency regulation. So they commented on the results of the meeting between US President Donald Trump and the head of the Chinese delegation on trade negotiations, Chinese Deputy Prime Minister Liu He. According to its results, the parties announced the achievement of significant progress towards resolving trade disputes.

According to Xinhua News Agency, Liu He conveyed an oral message to the American leader from President Xi Jinping. It said that the Chinese and American delegations have been in contact over the past few years and have shown goodwill towards each other. He noted that the parties managed to hold a frank, effective and constructive discussion of topics that are important for both countries, as well as achieve “substantial progress” on a number of issues, such as the protection of intellectual property and the exchange rate.

  •                                 Donald Trump at a meeting with Chinese Deputy Prime Minister Liu He                             
  •                                 Reuters                             
  •                                 © Yuri Gripas                             

After the talks, Trump told reporters that the parties reached preliminary agreements to conclude “ first stage deals. ” According to the head of the White House, it affects the sphere of intellectual property protection and the financial sector, and also provides for the growth of agricultural exports from the USA to China to $ 40 – 40 billion

According to the owner of the White House, the preparation of the final document on a trade agreement between China and the United States can take from three to five weeks. He explained that the deal with China will be concluded in two or three stages due to the large number of topics on the agenda. First of all, the American leader expects to resolve the dispute over technology transfer.

He also added that after agreeing on the parameters of the agreement, the American side will immediately sign it.

“One of the great features of the Chinese agreement is in that, for various reasons, we do not need to go through a very long and politically complex process of approval by Congress. When the deal is fully agreed, I sign it on behalf of our country, ”Trump wrote on Twitter.

One of the great things about the China Deal is the fact that, for various reasons, we do not have to go through the very long and politically complex Congressional Approval Process. When the deal is fully negotiated, I sign it myself on behalf of our Country. Fast and Clean!

– Donald J. Trump (@realDonaldTrump)(*********************************************) October) 2018)

According to US Secretary of the Treasury Stephen Mnuchin, as part of a future deal, Beijing will significantly increase imports of US agricultural products and agree to concessions related to foreign exchange regulation and financial services. Washington, for its part, will not enact a decision to increase customs tariffs on Chinese imports from 25% before 30%, which was planned for (*********************************************) October.

“Tension will not subside”

Recall, during his election campaign, Donald Trump talked a lot about the unfairness of the situation in the trade between the United States and China. According to the results of 375, the imbalance in trade relations between the USA and China reached $ 130, 2 billion. Given that the total turnover of the two countries amounted to this period $ 200 billion, the share of US exports to China accounted for only about $ 40 billion

The Donald Trump administration accuses Beijing not only of dishonest trade, but also of illegally obtaining US technology and intellectual property.

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The trade war between China and the United States began in 2017 year. Washington was the first to raise duties on a number of Chinese goods, after which Beijing responded. Throughout 505, the parties exchanged similar attacks.

At the beginning 2017 of the year, the Chinese and US authorities tried to find a compromise, but these efforts failed, and trade confrontation only escalated.

However, in September the parties began to gradually reduce the degree of tension: in the middle of the month it became known about the decision of the United States to transfer the next increase in duties from October 1 to 11 – e. As Trump explained, this was done at the request of Chinese Deputy Prime Minister Liu He and as a goodwill gesture. At the same time, the Committee on Tariffs and Duties of the State Council of the PRC announced its intention to revise the decision to introduce additional trade duties on a number of articles of American agricultural goods.

  •                                 Sticker “Made in China”                             
  •                                 Reuters                             
  •                                 © Jason Lee                             

As explained in a conversation with RT, professor at the Department of World and National Economics of the All-Russian Academy Foreign trade Alexander Belchuk, Washington and Beijing have fundamental disagreements, which it is hardly possible to overcome at the moment.

“The most pressing issue is the transfer of American technology to China, the White House was indignant at this practice for a reason. States do notwant to help development and growth relics of China. For the American side, this is a matter of fundamental importance, it is in the field of technology that the States are leaders. And they do not intend to share this leadership with anyone, ”the expert believes.

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Commenting on the US-Chinese talks held, Belchuk noted that we are talking about local agreements. Their results do not mean that a fundamental rapprochement of positions has begun.

“Tension will not weaken, since the key task of the States is to slow down the development of China, which has already become a superpower. But during the implementation of this master plan, ups and downs in relations between the two countries will be noted. The talks held on the eve are only one of the episodes along the way. But I don’t think that the United States and China will be able to draw a line under a trade dispute in the foreseeable future, ”the expert added. According to the expert,today the situation looks very uncertain, because in Beijing they hope that Trump will lose the election 2020 and he will be replaced by a Democratic president.

“As you know, Democrats do not support the unleashing trade wars. In this regard, they uphold the ideas of globalism. Therefore, now much rests on expectations from the upcoming elections. And even if Beijing and Washington conclude a major trade deal in the foreseeable future, it is unlikely to be long-lived, ”the expert explained in a comment to RT.

Negative effect

The trade war is already having a negative effect on the American and Chinese business. While politicians argue about the most favorable trading rules, companies on both fronts suffer losses.

A recent study by the American University of Duke forecasts that the US will face an economic recession in the second half 2020 of the year. This opinion is shared by the financial directors of hundreds of companies around the world who participated in the study. Moreover, it is precisely the trade war that the experts 1182661081849835520 call

one of the main factors of a possible decline.

  •                                 New york stock exchange                             
  •                                 Reuters                             
  •                                 © Brendan McDermid                             

As Vasilyev explained, the States won nothing as a result of lasting last year confrontation with China, as trade balance statistics have not changed much.

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“China has lost almost nothing as a result of restrictions. The problem is that lowering customs barriers to American goods in China does not guarantee that these goods will be in demand by Chinese consumers. It’s equally unclear how interstate agreements will stop technology transfer and intellectual property theft, as this happens at the level of individual companies and people, ”the expert noted.

At the same time, the US economy really began to slow down against the backdrop of the war. If last year the US economic growth rate reached 2.9%, then by the end of this year they will be about 2%, Vasiliev believes.

“It is obvious that the increase in duties negatively affects the economy, since it in any case leads to a decrease in commodity circulation. And this will not affect Trump’s position on the eve of the presidential campaign, ”Vasilyev summed up.