Signs of progress in US-China talks
WASHINGTON: Though markets are on edge and the arrest of a top Chinese executive threatened to spark a crisis, there are signs the US-China trade war can be resolved without further collateral damage to the global economy.
The whole world is watching the talks between Washington and Beijing, hoping a 90-day tariff truce will hold and the sides can end a dispute that threatens hundreds of billions of dollars in trade.
In recent days the small signs of progress, and perhaps more importantly the absence of new threats from President Donald Trump, have cheered investors worldwide, reversing some of the bloodletting that erased all of 2018 gains on Wall Street.
And the arrest in Canada of a senior Huawei executive amid US charges the company violated sanctions on Iran raised fears the renewed tensions could disrupt the talks — but so far this does not seem to have happened.
“What is clear is that both President Trump and the Chinese are trying to separate the issues,” said Edward Alden, a trade expert at the Council on Foreign Relations.
In fact, Beijing on Friday announced that starting January 1 it would suspend the additional punitive tariffs on US autos imposed in retaliation for Trump’s tariffs on China, cutting them to 15 per cent from 40 per cent.
And the talks last week produced reports the country would restart purchases of soyabeans from American farmers and ease investment rules for US companies. “China wants to make a big and very comprehensive deal.
“It could happen, and rather soon!” Trump tweeted on Friday, applauding the decision on car tariffs.
The ceasefire began after Trump met with Chinese leader Xi Jinping in Buenos Aires on December 1 and agreed to hold off on further tariffs or retaliation at least until March 1.
That means Trump will hold off on plans to more than double import taxes on $200 billion in Chinese goods at the start of the year and will also refrain from imposing tariffs on the remaining $246 billion in Chinese products the United States imports each year.