American Trade War With China Will Continue Despite Negotiation Efforts

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In early May, the global trade war started by United States President Donald Trump was among the most important news headlines in the geopolitical and economic realms. The trade war began a few months ago when Trump suddenly imposed harsh tariffs on steel and aluminum imports; this move prompted China to impose a long list of tariffs on agricultural products exported by American farmers, thus prompting trade officials to reach out to their Chinese counterparts in late April.

Even though Trump later decided to let some nations off the hook with regard to tariffs, China was not one of these countries. The retaliatory actions by China’s trade officials are being slowly felt by American farmers, a political segment that gave Trump considerable support during the controversial 2016 elections; to this effect, the White House sent the Commerce Secretary and the Chief Economic Advisor to China in an effort to reach some sort of consensus.

According to a report published by the Chicago Tribune, the U.S. trade delegation returned from China with few positive results. The overall picture is that the U.S. is still engaged in a trade war with China. It is unclear whether China asked to be one of the countries that the U.S. let off the hook with regard to aluminum and steel tariffs; those countries include the EU, Canada, Mexico, Brazil, and Argentina, but no Asian countries have been exempted. Japanese Prime Minister Shinzo Abe traveled to Palm Beach in recent weeks to meet with Trump at his Mar-a-Lago country club, where he formally requested to be exempted from the tariffs; alas, Trump did not honor this request.

Even though Treasury Secretary Steve Mnuchin told the Reuters international news agency that the negotiations had been positive, anonymous sources from within the White House stated that nothing has changed, and that $100 billion worth of tariffs on imported products from China could eventually be passed on to American consumers.

The trade deficit between the U.S. and China largely favors the Asian economic powerhouse, but analysts believe that there is not much that Trump can actually do in this regard. Chinese trade and development officials are firmly engaged in the “Made in China 2025” initiative, which seeks to transform the country’s massive manufacturing sector into a major producer of advanced technologies.

As long as the Made in China 2025 produces the intended results, the U.S. will likely continue to experience a major trade deficit and lose the trade war.

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