Senior America officials have really pursued attempts to cut a deal with China flat out over tariffs. This collaborative move is seen by many as a hopeful thaw in the always-chilly trade war between the two countries. The U.S. Commerce Ministry’s spokesperson confirmed that these overtures were made through relevant parties, indicating a formal approach to rekindle discussions.
China is still in the process of analyzing these overtures, as it reacts in real-time to an evolving environment on the sharp edges of U.S. trade policy. The U.S. placed these hefty tariffs of 145% on Chinese imports earlier this year, just a few months ago. In return, China struck back with 125% levies on U.S. goods. The ongoing increase in tariffs has soured bilateral relations. It has caused significant volatility and disruption in financial markets, appearing to slow down activity across the world economy.
The Chinese government could hardly have been more explicit in signalling its expectations. It demands that the U.S. withdraw all unilateral tariffs on steel and aluminum imports before substantive trade talks can even restart. According to a spokesperson from China’s Commerce Ministry, “If the U.S. wants to talk, it should show its sincerity and be prepared to correct its wrong practices and cancel the unilateral tariffs.”
To China, the U.S. tariffs are largely considered the equivalent of an attack that needs to be counterattacked. They claim that not removing any tariffs would be a clear sign of bad faith on the part of the U.S. Such a move would only erode the goodwill and trust between the world’s two largest economies even further.
Only through negotiations can the administration end the trade war and return to a collaborative approach. The consequences of this seeding conflict have been devastating not just to either country but the world economy. Observers note that a successful dialogue could help restore some stability in financial markets, which have been heavily influenced by uncertainties stemming from the trade conflict.
While both sides try to work through this tense situation, China is in a wait-and-see mode. Further, they are testing the sincerity of U.S. intentions before determining how or whether to engage in any real trade negotiations at all. These negotiations may have lasting implications. Their ramifications will reach far beyond China and the U.S., changing the international economic order as a whole.