Published: Thu, February 28, 2019
Business | By Pearl Harrison

American companies worry US-Chinese ties will worsen

American companies worry US-Chinese ties will worsen

The Yomiuri ShimbunA fruitless conflict that threatens the global economy should not be left to continue indefinitely. In their efforts to hash out an agreement, China and the United States are better advised to work for the best results while preparing for the worst scenario.

Yesterday, Trump referred to the relationship between China and the United States as "very strong", which may hint that a possible truce to the ongoing trade war between the two countries is not too far away.

Tariffs on $200 billion worth of Chinese imports had been set to rise to a prohibitive 25 percent from the current 10 percent if no deal was reached by Friday. This change appears to apply at least through the planned summit with Chinese President Xi Jinping in late March.

The U.S. trade deficit with China is expected to have grown to more than $400 billion in 2018, a record. -China trade talks also helped lift markets broadly in Europe and Asia, where China's main index, the Shanghai Composite, jumped to an eight-month high. He surely recognizes this, despite his aggressive position towards China previous year. The announcement of a cooling in U.S. "A very good weekend for US & China!"

As President Donald Trump looks to finalize a trade agreement with China - he tweeted on February 25 that a deal was in its "advanced stages" - one thing he should be sure to gain concessions on is the cost advantage Beijing possesses because of the excessive regulatory environment in Washington, D.C.

Negotiators from both camps have been seeking to iron out differences over China's treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft.

However, mitigating trade friction is indispensable for the revitalization of the Chinese economy.

Trump raised duties in response to complaints China steals or pressures companies to hand over technology.

The Justice Department announced criminal charges last month against Huawei and its chief financial officer, Meng Wanzhou, alleging bank and wire fraud, violations of US sanctions on Iran, and a conspiracy to obstruct justice related to the investigation. The balance of trade is influenced by various factors, such as global economic trends and currency exchange rates.

The two countries may reach an agreement at the upcoming summit.

One of Trump's demands that is easier to fix for Beijing is to reduce the trade imbalance between the two nations. While Tokyo should be happy with a deal that ends Chinese predatory behavior, it is unlikely that this agreement is that deal.

Chinese President Xi Jinping would need to undertake hard structural economic reforms to meet USA demands.

With the March 1 deadline approaching, the USA and China have reportedly started to sketch out the broad outlines of a deal, although the tough work lies ahead.

If such quantitative controls - involving fixed amounts of imports from a specific country in advance - go unchallenged, free trade will be impeded.

Pak: Well, it's basically a pause on escalating the trade dispute. So far, no details of the talks have been released and there is concern, especially among his hard-line supporters, that Trump will settle for minor concessions to claim a win, rather than the structural reforms that are needed - and which China is very reluctant to make.

Like this: