Talks are well and good, but actions speak louder

After weeks of escalating tensions in the trade spat between the world’s two largest economies, US President Donald Trump said on Tuesday that Treasury Secretary Steven Mnuchin will travel to China for talks. There is “a very good chance” of making a deal, he predicted. Let’s hope that optimism is not unfounded. That the torrent of words contains at least a trickle of changed intent. For although this may signal a respite in the tit-for-tat tariff announcements, unless the substantive discussions the two countries had last week have given him cause for confidence, his words alone do not suffice to dispel concerns that there is a trade war on the horizon.

Beijing has said it welcomes Mnuchin’s proposed visit. But there is no reason for it to relax its vigilance. Especially as both Trump and Mnuchin have implied that it was Washington’s actions that have pressured Beijing into promising further opening-up.

Taking Beijing’s newly announced opening-up policies as a sign it is yielding to Washington’s pressure would be to misinterpret its long-planned and long-prepared moves and only dash any hopes of positive outcomes from the talks.

Before embarking on his misguided course of action, Trump casually dismissed claims that his protectionist moves would have any blowback on the US economy, confidently quipping “trade wars are easy to win”. The opposition at home to his administration’s protectionist moves highlights his bravado was not based on reality.

Likewise, his moves have fomented anger among many of the US’ other trade partners, who are rallying in opposition to an unjust cause. Although it is not siding with China, the European Union has stated that, under the framework of the World Trade Organization, it plans to join it in negotiations with the US on the tariff hikes imposed on imports of steel and aluminum.

It is hoped the US has seen the error of its ways and it is willing to follow a more reasonable course. But it would be hasty to anticipate a swift and easy end to the trade frictions. Particularly as Trump has an irritable bee in his bonnet about the US’ trade deficits. It will likely take time to lubricate trade ties.

Nevertheless after all is said and done, hopefully something will be done as well as said to put an end to the uncertainties plaguing global trade. Healthy trade ties between the world’s two largest economies are beneficial to themselves, and the smooth running of the global economy as a whole.