CHINA-U.S. TRADE WAR MAY ESCALATE
Lack of progress after 2 days of talks and prospect of more tariffs add to uncertainties
THE trade war between the United States and China is primed to escalate after their governments failed to make progress in two days of talks.
The two sides had met with low expectations for this week’s meetings and no further talks had been scheduled, said a person familiar with the discussions.
The person said Chinese officials had raised the possibility that no further negotiations could happen until after November’s mid-term elections in the US.
The lack of progress and the looming prospect of more tariffs from both sides adds to the uncertainty for businesses, who have to decide whether it makes sense to invest in China or the US, given the rising political tensions and risk of punishing new taxes on trade.
A new round of tariffs could come as early as next month, but there is no guarantee that will be the last, or that there won’t be other measures.
“Now, it seems quite likely that the US will impose tariffs on the US$200 billion (RM820 billion) in imports from China, which will trigger a bigger round of shooting,” said Zhou Xiaoming, a former commerce ministry official and diplomat.
“It is impossible for China to drop the ‘Made in China 2025’ and its industrial policies as a compromise. But there is haggling room in IP (intellectual property) protection and market access issues,” he said.
The White House said the countries “exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship, including by addressing structural issues in China” identified by the US in an investigation into Chinese IP practices.
The two nations had “constructive, candid” communication, and would keep in touch about the next steps, said China commerce ministry in a statement yesterday.
The conclusion of the talks came just hours after Beijing and Washington rolled out their latest round of tit-for-tat tariffs on Thursday.
The Trump administration is preparing a far larger tranche of tariffs covering some 6,000 products from China with an annual import value of US$200 billion.
That move and the anticipated retaliation from the Chinese would mark the largest escalation so far and start to hit American consumers more directly.
The US could impose the duties after a comment period ends September 6.