After coming to power, Donald Trump waged trade disputes with his main trading partners: neighbors in North America, the European Union, and China. These conflicts have already cost the global economy US $ 700 billion, according to Dice of the International Monetary Fund.
The current US-China trade war originated after the US president announced in March 2018 tariffs on $ 50 billion of imports from China, alleging a Chinese track record of "unfair practices" and intellectual property theft. . In retaliation, Beijing imposed tariffs on more than 128 US products, particularly soybeans, one of the most important US export products.
Major clashes between Washington and Beijing in 2019
In May this year the dispute intensified further after the US imposed 25% tariffs on US $ 200 billion of imported products from China. The Asian giant has pledged to retaliate by raising tariffs on US $ 60 billion in US products in June.
The US Department of Commerce has put Chinese technology maker Huawei and its 70 affiliates on the commercial blacklist. The measure requires US companies to first obtain a government license before selling products to blacklisted companies.
US intelligence agencies accused the company of placing backdoor access tools on their devices under orders from the Chinese government, a feature that would allow them to spy on users of those devices. However, Beijing and Huawei have denied that such a directive exists.
Later, the conflict extended to the monetary field. In addition to devaluing its currency, Chinese authorities have tried to reduce US imports. To further aggravate the extremely tense situation, Beijing urged state-owned companies not to buy American agricultural products. US President Donald Trump reacted immediately by accusing China of "monetary manipulation."
China dropped its price to its almost an historic low. It's called “currency manipulation.” Are you listening to the Federal Reserve? This is a major violation which will greatly weaken China over time!
– Donald J. Trump (@realDonaldTrump) August 5, 2019
China has lowered the price of its currency almost to an all-time low. This is called "monetary manipulation". Federal Reserve, are you listening? This is a major violation that will greatly weaken China over time.
The fight between the two major economic powers has created many uncertainties in the world economic scenario.
Coming to a solution?
In mid-December 2019, the Chinese Ministry of Commerce said it was able to settle with the US the text of the first part of the economic and trade agreement that provides for the gradual withdrawal of US tariffs on Chinese products. This information was later confirmed by President Trump himself on Twitter.
….. The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!
– Donald J. Trump (@realDonaldTrump) December 13, 2019
We have agreed a very large Phase One Agreement with China. They (Chinese) have agreed to make many structural changes and massive purchases of agricultural products, energy, manufactured goods and more. The 25% tariffs will remain as they are, with 7½% applied to most other (products). The penalty charges that should be applied on December 15 will not be introduced due to the fact that we have reached an agreement. We will start negotiations on the Second Phase Agreement immediately, without waiting for the (presidential) elections of 2020. It's a fantastic deal for everyone. Thanks!
China has only made vague commitments on protecting intellectual property, abandoning exchange rate manipulation and liberalizing the financial services market. The main problems – the alleged theft of US technologies and Beijing's subsidies to Chinese companies – were left out of the deal.
However, some social media are beginning to look skeptically the so-called diplomatic advances. US President Donald Trump considered the mid-term mini-deal a triumph, but his opponents a capitulation.
For example, US Senator Chris Murphy was very skeptical, criticizing the deal negotiated with Beijing.
The China trade deal appears to be a full capitulation, as predicted.
The trade war cost America 300,000 jobs, and in exchange, in this "deal" China made exactly ZERO hard commitments to structural reform.
What a disaster.
– Chris Murphy (@ChrisMurphyCT) December 13, 2019
The trade agreement with China appears to be a full capitulation, as predicted. The trade war cost America 300,000 jobs, and in return for this "deal" China made exactly zero concrete commitments on structural reforms. What a disaster.
According to beads made on napkin By Senator Murphy, farmers earn $ 29 billion from this deal, while their losses from the trade war amount to $ 11 billion, agriculture compensation has cost taxpayers $ 28 billion. "So… we lost / spent $ 39 billion, we made $ 29 billion, good work!"
After all, who won?
Sputnik Brazil spoke with a Russian expert to comment on progress and future challenges in Sino-US relations.
Sputnik Brazil spokesman Sergei Lukonin, head of the China Department of Economics and Politics at the Primakov Institute of Economics and International Relations, said it was a transitory truce.
"I think this deal is not Trump's triumph, but it cannot be considered insignificant, it is a transitional phase of truce in a trade and economic war, in which one party wants to maintain undisputed leadership, and the other party (China) gradually increases its influence by challenging Washington's leadership, "commented the economist.
The terms of the truce agreement are known only according to information provided by the US. They say Beijing has pledged to increase US $ 200 billion in purchases of US goods and services over the next two years compared to the pre-war level in 2017. In response, the US will reduce part of its tariffs on Chinese imports and will give up the introduction of new ones from 15 December.
This mini-agreement aims to reduce the huge trade deficit between the US and China by mitigating one of the factors in the conflict. However, the main issues in dispute remained unresolved.
According to Lukonin, one of the main factors that was at stake in the development of the conflict between countries this year was the slowdown in Chinese GDP growth.
"In my view, the main factor is the slowdown in China's GDP growth rate, and this allows the US to talk about its victory. China responds with measures that boost the national economy (tax cuts, broadening of some compensatory payments, among other measures) and the development of new directions in international trade. Beijing insists that its economic slowdown is a classic transition from quantity to quality, and that the US has nothing to do with it, " he explains.
Chinese authorities have confirmed that they are willing to increase the purchase of wheat, rice and maize, however they have not assumed any contractual obligations, and Chinese officials refuse to cite any figures.
Thus, the continuation of the trade war is more than likely. Along with impeachment, the trade dispute will be the backdrop of Trump's election campaign.
What will be the continuation of the dispute in 2020?
With the first phase of negotiations there was relief, but nothing changed in the general framework of the trade war, the main issues of discord were left out. For its resolution, Washington will have to be able to achieve from China the implementation of structural changes, without which the "second phase" of the agreement and a victorious end to the conflict will be impossible.
"It will be very complicated, we have different systems. We will have to find a way to integrate these systems in a way that the US gets more benefits than now," US trade representative Robert told reporters next stage. Lighthizer, quoted by Reuters.
Expectations remain fragile not only for future peace, but also for the current truce in this trade conflict, said to China File, former US State Department adviser and professor at the University of Sydney Charles Edel.
"Whatever happens, I don't think tensions between China and the US will ease," he said the prospects of the intermediate deal even before it was announced. "The objectives of Washington and Beijing are fundamentally opposite and perhaps even incompatible, so any agreement will be temporary, and at best fragmentary."
In the opinion of the head of the world's largest political advisory firm Eurasia Group, Ian Bremmer, regardless of the truce agreement, "US-China relations will be much worse next year."
Their arguments were that next year a number of crucial problems will arise: the conflict over the company …
. (tagsToTranslate) Trade War (t) Donald Trump (t) Xi Jinping (t) Economic Sanctions (t) United States