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US-China Trade Talks: Optimism Based On Broad Assumptions.
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US-China Trade Talks: Optimism Based On Broad Assumptions.

US China Trade War-Trade Talks

The strained diplomatic affair between US and China seemed to have reached far end, to bring both the countries on table for a constructive discussion around the ongoing trade US China trade war. As reported US and Chinese counterparts are to hold a set of discussions in Beijing on Monday.

The meeting is a far end result of the tariff hike war started by Trump and responded by Xi.  In Last year, Trump imposed tariff hikes of up to 25 percent on $250 billion of Chinese goods which were responded by Xi, imposing a tariff hike on $110 billion of U.S. goods, affecting the returns both the economies.

Till now, negotiators from both the countries have showcased optimism over the scheduled trade talks but President Trump seems to have an over optimistic approach. In his recent statement he indicated United States has an upper hand in the first crucial round of US China trade talks.

Backing his optimism, he explained that report from Labor Department has reflected a positive estimation whereas China as an economy is not doing great. He said, “It puts us in a very strong position. We are doing very well.”

President’s Trump’s is not entirely incorrect in his assumption that China has suffered a setback due to the American tariffs on $250 billion worth of Chinese imports. But at the same time he has ignored that the tariffs levied by United States and the counter tariffs levied by China have largely affected the domestic front of America, during the ongoing US China trade war.

As of now, Chinese counterpart has offered various concessions including reducing tariffs on some American products, in effort to deal with the tariff bomb of on $200 billion worth of imports which will increase in tariffs to 25 percent from 10 percent.

Top administrators and US negotiators like Jeffrey Gerrish, the deputy United States trade representative, and David Malpass, the Treasury Department’s under secretary for international affairs, have showcased optimism stating that US is in strong position in the ongoing US China trade war. With bringing down levied tariffs they will also push for China to hand over intellectual property and an agreement to buy more agricultural and energy products from the United States.

However, given the China’s stance, the promises made by Trump and his top administration look a little off board.  Chinese counterpart is smart enough to not let go off US weaknesses so easily. In fact it is very likely that it will prolong the fight by indulging into legalities, beyond March 2. This will hurt consumer spending, corporate profits and economic growth in America.

Instead of further fueling the ongoing US China trade war, it is important that the President and the administration looks at the internal loss of consumer spending, corporate profits, farmer interests and work on an arrangement to subside the conflict.

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