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China Stresses that the US Must Remove Tariffs, Then Ink Trade Deal – Our Views

China Stresses that the US Must Remove Tariffs, Then Ink Trade Deal - Our Views

A pattern is emerging that places China right in front of  the US, now demanding that a trade deal can only take place if tariffs are removed. China has stressed this point and continues to do so. On Friday, according to Bloomberg News, the Economics section, it mentions an influential blog connected to the state media stated that talks will “go back again” without that step of cutting tariffs. Despite the promise to restart trade talks, proposed when US President Donald Trump and President Xi Jinping met in Osaka Japan at the G20 meeting, these comments now suggest that there will be no meetings – if you read closely. As yet, there have been no dates nor suggested cities for this meeting. This now puts the meetings on hold, one would think. 

“If the two sides are to reach a deal, all imposed tariffs must be removed,” Ministry of Commerce Spokesman Gao Feng said on Thursday. He went on to say that China still has a very clear and consistent stance on this subject. He went on to say that cancelling these punitive tariffs the US imposed is the “most important” request and that will not change.

Our View: China, like most Asian nations, is steady and long-term in its view. This is always an advantage that it will have over US, especially given the terms of leaders – Donald Trump four years, and Xi just made himself President for Life. But the US has several advantages. The US has a Navy that can, on its own, dominate the waters around China. But more importantly China, to exist, must rely on imported food from abroad, imported energy from abroad and sell its good abroad to other nations. These three areas expose China to the world. In short the US has local needs with global reach, and China has global needs with local reach. 

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