THERE are growing fears in the world today of a global economic slowdown as a result of the ongoing trade war between the United States and China.
US President Donald Trump threatened to impose additional import duties on Chinese goods starting September 1. In response, China let its currency weaken so as to lower the export prices of its goods, prompting Trump to accuse China of currency manipulation. Chinese buyers also cancelled multi-billion- dollar purchases of US soybeans.
Then Trump unexpectedly announced a delay in the new tariffs on Chinese products – mobile phones laptops, video game consoles, toys, computer monitors, footwear and clothing – until December 15 because of “health, safety, national security, and other factors.” Trump later said the delay was in part to avoid hitting US shoppers this Christmas.
Six months ago, Chinese negotiators were reported considering possible concessions, including greater purchases of US farm goods. But talks broke down last May over how to enforce any settlement. China expected the US to end its tariffs on Chinese goods once an agreement is reached, but the US reportedly insists that the US tariffs will stay to enforce Chinese compliance.
China’s President Xi Jinping is now reportedly getting tougher instead of backing down. With China’s ruling Communist Party due to celebrate the 70th anniversary of its assuming power in China on October 1, he cannot appear to be weakening before what China considers US bullying.
The last time US and Chinese negotiators met was in July in Shanghai. The negotiators – led by US Treasury Secretary Steven Mnuchin and China Vice Premier Liu He – are to meet again in September, this time in Washington, DC.
In the last few months of the trade war, some international observers say it is no longer a simple matter of China purchasing more US goods so as to correct their lopsided trade balance, which is heavily – four times more – in favor of China.
China is said to be determined to be a global economic power in robotics, electric cars, and other fields protected by government subsidies, but the US and its economic partners – Europe and Japan – accuse China of using technology China acquired from the West by pressure or even outright theft.
The world, including the Philippines, can only watch and wait as the negotiators of the two biggest economies on the globe meet again this September. As always, there is hope that concessions will be made and agreement will be reached to end the fears of economic slowdown and raise the world to new levels of development and progress.
