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China and the US Trade War – More Demands

Trump Demands Concessions from China, China Bets US Will Blink First

Both the US and China are now locked in a waiting game on trade with the US President Donald Trump pushing China for more concessions while the Chinese, and they are making a solid case, that the US needs to resolve its issues to ensure trade tensions fade and relations are normalized. Right now, negotiations are at a standstill and some are even saying at an impasse as the two leaders and their teams are currently communicating through the press, not face-to-face.

Now the US President is saying that he is not in a hurry to make a deal and that he may even add new tariffs to the current ones imposed on Chinese goods. Remember that he increased tariffs to 25% from 10% in May. Mr Trump said that if China agrees to certain conditions, including cancellation of all additional tariffs, and following the direction of what was agreed at G20 in Argentina last year, a deal, as he implied can be done. The upcoming G20 in Japan this month is in Osaka, a city that is 40 minutes flight from Tokyo.

This is a chance for Mr Xi of China and Mr Trump of the US to meet, face-to-face as presidents, the hope from their negotiating teams is that a deal will be made. However, regardless of what deal is made, Mr Trump will likely call it a win and do a victory lap. China is asking the US to show “sincerity” in negotiations. The US is demanding, like the Europeans and Japanese, fair trade and fair treatment of firms with regards to intellectual property rights and theft. China, for its part, has promised to promote a more just system. 

Some experts are asking for a complete break between the US and China, and the world will have two competing systems, two internts (one open and one closed) as well as different trading systems. More on this topic in the coming weeks.

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