Trouble With U.S.-China Trade Deal Talks


The U.S.-China trade war, which began when President Trump took office in 2016, has reached an impasse. Tariffs have led to harm on both sides leading to fluctuations in the world markets. Talks for reaching a trade deal between the two nations was in progress but recently, U.S. trade representative Robert Lighthizer has accused China of backtracking on its commitments. He also insisted that President Trump’s threat to impose new taxes on Chinese exports came after China reneged on promises.

On Sunday, Trump went on Twitter to announce that the United States would more than double its tariffs on $200 billion of Chinese goods from Friday with a possibility of introducing fresh tariffs down the road. Tariffs of ten percent on certain goods would rise to 25% and $325 billion of untaxed goods could face 25% duties “shortly.” He further pointed out that the U.S. had been losing $500 billion a year on trade with China, writing, “The trade deal with China continues, but too slowly, as they attempt to renegotiate. Sorry, we’re not going to be doing that anymore!” After imposing duties on one another’s goods since last year, the U.S. and China had been negotiating for weeks and had appeared to be close to finishing up a deal. However, according to reports, U.S. officials have become frustrated by China’s refusal to change its laws as part of the deal. Beijing hit back with duties of $110 billion of U.S. goods, blaming the U.S. for starting “the largest trade war in economic history.” Fears of a slump are causing a slowdown in the world stock markets with the news itself leading to a 5.6% tumble for Shanghai Composite and 471 points in early trading for Dow Jones. The International Monetary Fund has warned against further escalation believing it could eventually result in weakening of the global economy.

Many have speculated that even if China complies and trade deal negotiations begin again, President Trump has to come in terms with the fact that they are not going to give him everything he asks for. Furthermore, deal or no deal, the rivalry between them is only expected to broaden and become more difficult to resolve. The geopolitical, as well as the technological competition, has elevated fears. The One Belt One Road initiative bought recognition to China and allowed for its influence to be spread across Africa and Asia- emerging as a regional hegemon. Its breakthroughs in the technology race have called on several prominent figures and firms to get involved, particularly Huawei. Americans have pushed back against the growing presence with tit-for-tat tariffs since last year.

The U.S.-China trade war implications have already led to ripples across various economies, hurting themselves more often. Though a trade deal might not solve things in all sectors, it might be the start of better economic well-being and a further improvement in the political arena.

Kavya Singh

An economics and international relations (major) second-year undergraduate student at The University of Sydney.
She's a bubbly, nerdy economist with a passion for reading and always prepared with a hot cup of cocoa to work towards solving global issues. Her fascination with new places, academic research and challenges has led her to the United States, where she's currently undertaking an exchange semester at the Wharton Business School, University of Pennsylvania.
Kavya Singh

About Kavya Singh

An economics and international relations (major) second-year undergraduate student at The University of Sydney. She's a bubbly, nerdy economist with a passion for reading and always prepared with a hot cup of cocoa to work towards solving global issues. Her fascination with new places, academic research and challenges has led her to the United States, where she's currently undertaking an exchange semester at the Wharton Business School, University of Pennsylvania.