Although an initial trade deal has been struck between the White House and Beijing, many analysts are skeptical of the deal’s success and its ability to prevent future conflicts from escalating.
Although an initial trade agreement has been reached between the White House and Beijing, many analysts are not positive about the success of the agreement and its power to prevent future conflicts from escalating. Beijing officials are outraged by Donald Trump’s protectionist and restrictive economic approach. Under such circumstances, it is likely that the Chinese will use their own tools in the near future to direct and manage this economic conflict. Beijing has recently complained to the World Trade Organization about the United States. The reason for this complaint is the US action to discriminate in the field of free trade. However, the World Trade Organization does not seem to have the power to stop the economic conflict between Washington and Beijing.
Trump seems to be trying to simultaneously threaten China and a united Europe in order to implement his election slogans of strengthening a protectionist economic approach. Although the European Union has not yet reacted strongly to Trump’s actions (including imposing tariffs on steel and aluminum), Beijing has already decided to react decisively to Washington’s economic stimulus measures.
The Americans believed that the real exchange rate of the yuan and the dollar should be half that, and the People’s Bank of China kept it at its current level by constantly injecting the yuan into the market. That kept Chinese goods cheap. In addition, the Americans demanded a serious deal to open up China’s energy and food markets. American farmers, for example, were trying to take over the monopoly market of Chinese soybeans and pork. On the other hand, shale gas companies are eager to export LNG to China as the world’s largest energy importer.
The Chinese and Americans initially embarked on bilateral negotiations, but when the talks failed, Trump immediately took up arms and initially imposed tariffs on $ 100 billion worth of Chinese goods. China imposes 5 to 10 percent tariffs on $ 75 billion in US exports to China Chinese goods such as laptops and mobile phones will be announced by the end of the year. An agreement recently signed between Donald Trump and Chinese Deputy Prime Minister Leo Hee is the result of a two-and-a-half-year trade war, and perhaps some sort of the two countries are fleeing forward to make matters worse. The agreement seeks to address some of the US side’s concerns, including imports of agricultural goods and opening up China’s financial services market. Under the two-year agreement, China will receive $ 200 billion more in goods than in 2017. This would mean a $ 100 billion reduction in the trade deficit each year. The United States, meanwhile, has removed China from its list of countries manipulating its exchange rate and will suspend previous tariffs. Many American economists are skeptical of the deal, citing controversy in the near future over Washington-Beijing economic ties.