A TRADE agreement between the United States (US) and China may be signed at the Asia Pacific Economic Conference in Chile on November 16-17, US President Donald Trump said the other day. “We’re working with China very well,” Trump said. “I think it will get signed quite easily, hopefully by the summit in Chile where President Xi and I will both be.”
Trump said that as part of the first phase of the expected deal, China agreed to buy up to $50 billion of US farm products annually. A second part of the talks is expected to address other issues like forced technology transfer.
The world economy has suffered considerably since the start of the trade war some 15 months ago when President Trump started imposing tariffs on Chinese imports in a bid to correct a huge trade deficit. China responded with tariffs of its own on US imports.
There were talks by some trade officials and announcements of the two sides stepping back on some early claims and positions. But the trade war proceeded like a roller coaster ride, with talks hopeful one day, grievously disappointing the next.
While America’s soybean farmers were most directly affected along with China’s manufacturers and exporters, collateral damage was felt by nations around the world, for the US is the world’s biggest importer and China is the biggest exporter. As one report put it, the damage was felt all the way from the fjords of Iceland to the auto factories of Japan.
The International Monetary Fund (IMF) said the fallout in various countries from the trade war slowed global growth in 2019 to 3 percent, the lowest in a decade. The damage was particularly felt in European countries which rely heavily on exports, the European Union’s economic and financial affairs commissioner said. Germany’s trade group revised downwards its export forecast for 2019 to just 0.5 percent from 1.5 percent. Iceland which has become dependent on tourism reported arrivals are down 15.6 percent from last year.
Developing countries like the Philippines may fail to sustain the higher economic growth they need to reduce poverty, as the US-China trade war has reached a “critical threshhold,” Finance Secretary Carlos Dominguez III said. “Beyond this point we see a world thrown into economic decline.”
The escalating trade tensions between Washington and Beijing raise the prospect of global economic slowdown, he said. Forty-seven percent of low-income countries are now in “debt distress,” he said, referring to difficulties in servicing national debts.
After President Trump voiced his expectation that US and China may be able to sign an agreement ending their trade war by November 16-17, China Vice Foreign Minister Le Yucheng confirmed that progress has indeed been made in the talks. Any problem can be solved as long as both sides respect each other, he said at the Xiangshan Forum in Beijing. “The world wants China and the US to end their trade war,” he said.
This is the most hopeful report yet on the US-China trade war. We join in the hope, shared by all nations around the world, that finally, agreement will be reached and a major obstacle to world economic progress will finally be removed.
