US – China trade talks appear to be breaking down amid talk of a trade war between the two nations. The US and China have completed their latest round of trade talks in the Chinese capital, Beijing. However, any agreements reached during these talks may be null and void if the US goes ahead with planned tariffs on Chinese goods. Last month, China agreed to a ‘significant’ increase in its purchases of goods and services from the US. However, these agreements would be null and void if the US applies further trade tariffs on Chinese goods.
Import Tariffs on Canadian and EU Goods
The two countries have been communicating well in areas such as energy and agriculture. However, any agreements made will be subject to “final confirmation” by both parties, namely China and the US. This now appears to be a very fragile agreement. After President Trump’s announcement regarding import tariffs on goods from Canada, Mexico and the EU, including the UK, any such agreements seem to be largely irrelevant.
China and the US have been threatening each other with tit-for-tat tariffs for some time. These involve goods to the value of $150 billion on each side. However, the recently announced import tariffs have made any US trading partner very wary of Trump’s intentions. China seems keen to continue with the agreement made but has also stated that any additional tariffs will nullify that agreement.
US – China Trade Talks: White House Warns of Tariffs on Chinese Goods
Last week the White House issued a warning that it would be looking at applying tariffs on imported Chinese products worth $50 billion. The announcement also stated that tighter controls over exports would be applied and restrictions would be applied on Chinese investments within the US. The Chinese naturally took this seriously, and the Chinese press is commenting on the way the United States continually changes its mind on such agreement made during US-China trade talks.
Two of the major issues the US has with China include greater protection of US intellectual property. The US claims this is being illegally acquired by China. The other major issue is Chinese state subsidies leading to steel and aluminum over-production.
Chinese Not Afraid of Trade War
Chinese commentators are insisting that trade negotiations between China and US must relate to common interests between the two countries. Not just to US interests! It has been suggested that China is not prepared to tolerate any further unilateral changes to trade agreements. It has been stated that the Chinese government does not want a trade war with the US, but also does not fear one.
EU Not Afraid of Trade War With US
The United States has few enough allies at the moment, after annoying their traditional allies, the UK and Europe. The EU does not fear a trade war either and is well prepared to make President Trump think again. It should be said that Trump has some level of right on his side. The US has a significant trade deficit with China and he is trying to reduce this. The EU, Canada, Mexico and the UK likely believe that applying tariffs to them is not the right way to achieve that.
