US politics expert Steven R Okun warns that even if the US and China reach a deal on tariffs, the adversarial relationship will worsen. He cites China's non-compliance with WTO commitments, its industrial policies aimed at dominating key sectors, and its alleged actions like forced technology transfers and cyber theft as justifications for US tariffs. While President Trump initially appeared conciliatory towards China, analysts believe the trade war is likely to continue, with both sides engaging in tit-for-tat measures. Okun suggests that China may test the limits of US concessions or escalate the conflict further, while the US aims to pressure China into changing its economic practices.
Even if the United States and China reach a deal on tariffs, the adversarial relationship will worsen, says US politics expert Steven R Okun.
Though US President Donald Trump, sworn in for a second term last month, appeared to strike a conciliatory tone on China, telling global leaders at the World Economic Forum that he looked forward to “getting along” with Beijing, the unexpected positive tone - especially after his campaign threats to impose tariffs as high as 60 percent on China - has led some experts on both sides of the Pacific to forecast a grand bargain coming between the United States and China. However, the current climate suggests otherwise. The US is set to impose tariffs on a range of Chinese goods, including $2.4 billion worth of consumer goods, like smartphones and laptops, along with 10 percent duties on crude oil, farm equipment, large-displacement vehicles and pickup trucks, in addition to a targeted investigation of Google. These tariffs, among other measures, are to take effect on February 10. Even if these tariffs get paused, as did the ones between the US with Canada and Mexico, that will not be indicative of an easing of this trade war.For the US, the origin of this trade war traces back to China not living up to its World Trade Organization (WTO) commitments after joining in 2001, and certainly at least 10 years ago when Beijing rolled out its Made in China 2025 blueprint, an ambitious industrial policy aimed at dominating key sectors of the 21st century achieved through state subsidies and an uneven playing field for foreign businesses. Add on the forced technology transfers, cyber theft and China’s failure to live up to its trade commitments, and the US finds ample justification for the tariffs implemented by both the Trump and Biden administrations, and the new ones in Trump 2.0. From Washington’s perspective, China isn’t looking to avoid a trade war - it simply wants to escape retaliation for the one it started. There are a few days before China’s retaliatory tariffs are set to kick in, and reports suggest China is preparing an initial proposal for trade negotiations. According to the Wall Street Journal, the proposal involves reviving the “Phase 1” deal that Mr Trump signed with Chinese President Xi Jinping in 2020. The two leaders are expected to meet at the G20 summit in November. However, for a true resolution to occur from Washington’s perspective, China must go past just buying more stuff from the US and move off its current path. Sure, China doesn’t want tariffs from the US, but it’s hard to see any substantive behaviour China will change to keep the US from its course of retaliation beyond tariffs, such as investment restrictions and export restrictions targeting China’s ability to make advanced semiconductors. Analysts point to China having another 10 percent levied against it while Canada and Mexico each had 25 percent as evidence that Mr Trump is serious about taking a hard line against Beijing. Michael Cunningham of the Asian Studies Center at the Heritage Foundation told me that Mr Trump will likely have to act against Beijing multiple times during his presidency. “I wouldn’t say Trump went easy on China by just having 10 percent tariffs. He worked out deals with Canada and Mexico to pause their tariffs, but the tariffs on China went ahead as planned, and he has said multiple times that additional tariffs are forthcoming,” Cunningham said. “Doing so sends a message that he’s serious, which gives him negotiating leverage, without getting too far ahead of his team’s ongoing review of US-China trade that presumably will help inform future tariff plans,” Cunningham added. “Trump has made clear he is prepared to make a deal with Xi, with whom he believes he has a special relationship, although the tit-for-tat may go several rounds,” she told me. “Ultimately, whether we will see a prolonged US-China tariff war may depend more on whether China is interested in playing Trump’s game. China could choose to test how little it can offer to buy Trump off or, instead, up the ante exerting its own leverage on the US.”Just weeks into his presidency, forecasting Mr Trump’s next moves is futile. Only days ago, speculation was rampant about the trajectory of the North American trade war. Then Mr Trump agreed to pause tariffs on Canada and Mexico for 30 days, after reaching last-minute deals with its neighbours on border enforcement. Regarding that, Mike McCurry, White House Press Secretary under President Clinton, told me: “I think this was all a bluff. Canada and Mexico basically did what they were already doing but saw it in their interest to let Trump take a victory lap. Dealing with the Chinese will be trickier.
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