Despite the rapid fire tweets and rogue comments coming out of the White House in what many believe are the final stages of the US-China Trade Talks, it seems that the Chinese delegation is calm and relaxed. Of course, Chinese Vice Premier Liu is still set to join a delegation of 100 trade negotiators this week in Washington, there are still those who think these talks can break down.
Mr Victor Gao from the Center for China and Globalization, said this on CNBC, “China needs an agreement with the United States, and I think the United States also needs an agreement with China. Uncertainty, unpredictability, and the prospect of greater turmoil will be a killer for both countries.”
This seems to be the understanding recently as many global investors are sitting on the edge of their seats, waiting for the outcome of talks. There will be a decision on trade, a short-term solution that will allow both Trump and Xi to do a victory lap.
However, we at Classiarius believe that the structural barriers to trade are deep and will take 10 years to fix. The US has a system that allows goods to enter the country efficiently. Still, these two super powers can move forward and have ongoing talks each year for the next decade – they can maneuver as they move forward.
China has a system that is structurally different and will take many years go adjust for imports. We have sent research on this topic and are happy to resend.