Christian Benabe/Contributing Writer
The U.S. and China continue engaging in talks during the 90-day truce, which began December, from the trade war. However, there is not much optimism in a positive resolution despite reports of progress in trade talks.
Threats to raise tariffs on $200 billion worth of Chinese imports were postponed after President Donald Trump and Chinese President Xi Jinping met at the G-20 Summit in Argentina last November. If an agreement is not reached by the end of the 90 days, the scheduled increase from 10 percent to 25 percent will be implemented.
“The tariff dispute is only one facet of a titanic struggle for global economic and technological supremacy, between China and the American-led coalition,” said Thomas Breslin, an FIU professor in the Department of Politics & International Relations who specializes in U.S.-China relations.
The relationship between both countries has been tense for some time, but has since escalated after Trump’s announcement to place tariffs on steel and aluminum imports last March.
On the list of negotiations is the issue of intellectual property, in which the U.S. has accused China of stealing from American firms, forcing them to transfer technology to the country. Breslin said the U.S. insistence on protection of intellectual property and equal treatment under the law for U.S. financiers and service providers would benefit nations in the European Union as well.
“If the Chinese economy and, with it, China’s international clout, falter, countries that feel they have been disadvantaged in deals with China may have an opportunity to re-negotiate those deals,” he said.
Breslin is not optimistic about agreement between the two countries as both have come divided with very little trust in each other.
“Both sides, having failed to get substantial concessions, may lick their wounds, boast of victory or of a “win-win” outcome, and rethink how they might be victorious in the next round of talks, which would come long enough later to preserve the illusion of a successful outcome,” he said.
He also said that if the matter is not resolved the consequences could be problematic, as the relationship between the countries could worsen.
“U.S. business interested in low-tech products will accelerate its ongoing movement away from China to other, lower-wage, countries in Asia,” he said. “Higher-value-added industry will reconsider the attractiveness of the China market especially as China steps up its past practice of taking business people hostage for political or economic purposes and the U.S. and Canada recently appear to copy that Chinese practice.”
The fact that the CFO of Huawei, China’s information and communications technology solutions provider, Meng Wanzhou, was arrested last month in Canada per request of U.S. authorities and awaiting extradition does not ease the tension. Wanzhou has been accused of fraudulently representing Huawei to get around US sanctions on Iran.
“In recent months, U.S. business people have been leaving China because the economy and the prospects of profit have been shrinking. Adding the prospects of being held hostage can only accelerate the departures,” said Breslin.
Photo by chuttersnap on Unsplash.
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