Dr. Rebecca Harding, CEO
As US-China trade talks resume this week, the spectre of global trade disintegration on nationalistic grounds looms ever larger. There is one month to strike a deal between the two countries before the 90-day ceasefire in tit-for-tat rhetoric expires. At stake is $200bn of Chinese exports to the US which will have tariffs of 25% imposed on them, as opposed to the 15% now.
The Trump administration’s demands are that China buys more US goods, make its financial and technology markets more open to global investors, ends its “intellectual property abuses” and puts a stop to its “Made in China 2025” programme. China in return argues that it has opened up its markets and it has committed to buying more US soya.
While the rhetoric between the two sides has moderated slightly, President Trump made it clear in the first week of February that there was no chance of him meeting President Xi before the deadline expires, and US negotiators have indicated that there is still a “mountain to climb.”
We should not expect a resolution to this conflict this week. It is important that both sides are seen to “win” which will be a complex, not least because this is not really about trade – it is about economic systems. The growth of China challenges the status of the US as the world’s dominant economic power. Yet if the US accepts this, it is also accepting a multi-polar world with its own role smaller and less influential economically, technologically and potentially militarily as well. This is a big challenge and will take years, not weeks or months.
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