US’s “fight and talk” strategy in trade war with China

Wednesday, 2018-09-19 16:14:24
 Font Size:     |        Print
 

US President Trump's announcement of new tariffs on US$200 billion worth of Chinese goods has escalated the trade war between the world's two largest economies. (Photo: Reuters)
 Font Size:     |  

NDO – The trade war between the United States and China has been escalated to a new level after US President Donald Trump announced plans for tariffs on US$200 billion worth of Chinese imports. The move came just days after the White House announced it had invited Chinese partners to join a new round of trade talks.

According to Trump’s statement, the next wave of tariffs, which are scheduled to take effect on September 24, will start at 10% before climbing to 25% in January 2019. Along with the abovementioned “punch”, the White House accused Beijing of a series of unfair actions involving US intellectual property and technology. A reserve “attack” has also been prepared by the US side for the trade war with China as President Trump warned of immediately placing tariffs on another US$267 billion worth of imports if China takes retaliatory action against the US.

The US’s imposition of new levies on Chinese goods took place just days after the White House said US Treasury Secretary Steven Mnuchin and his associates had invited Chinese partners, including Vice Premier Liu He, to join a fresh round of trade talks. Accordingly, the meeting may take place in Washington or Beijing in the coming weeks, aiming to resolve concerns and disagreements between the two sides. Just last week the Chinese Foreign Ministry applauded the US proposal to hold a new round of trade talks.

However, Trump’s decision to impose tariffs on US$200 billion worth of Chinese commodities this week has thrown cold water on the outlook for the trade talks between the two largest economies in the world. .

Earlier, it was said that China might refuse to participate in new trade talks if Washington continues to impose additional taxes on Beijing’s goods. Meanwhile, some Chinese businesses have called on the country’s leaders to impose restrictions on the sale of equipment and items that US firms need, while using “export restrictions” to threaten the US supply chain.

Chinese officials have criticised the US’s tax increases on Chinese goods. At a meeting with representatives of foreign companies in China on September 18, Chinese Minister of Commerce, Zhong Shan, said that Washington’s unilateralism and protectionism would affect the interests of both the US and China, as well as damaging the global economy. On the same day, Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), said at a conference in Tianjin that the US’s trade actions against China will not work as China has ample fiscal and monetary policy tools to cope with the impacts. Meanwhile, on the morning of September 18, China’s Vice Premier Liu He called a meeting to discuss the government’s response to the US’s decision to impose additional tariffs. According to a spokesman for the Chinese Ministry of Commerce, Beijing’s retaliatory tariff measures will be announced immediately on September 24.

As for the US side, there is no indication that the Washington administration will change its stance on Beijing, because the US has stated its belief that it hold a position of advantage in the trade war with China. Writing on his Twitter, US President Donald Trump said that the US was under no pressure to reach an agreement with China and that Washington would soon collect billions of dollars in taxes and from manufacturing domestic products.

The latest moves in the US-China trade war have shown that the US has made thorough calculations and is applying a strategy of “both fighting and talking” in the trade war with China. As Washington’s tough stance remains unchanged, a new round of trade talks between the two sides is unlikely to take place this month, and even if it gets underway, it will not be able to cool down the trade war between Washington and Beijing.