Meanwhile, the United States and China are conspicuously trying to reduce their trade war temperatures. They will soon begin high-level negotiations in Geneva. The new players taking center stage in this week’s talks will be some new and leading officials. Especially US Treasury Secretary Steven Mnuchin, US Trade Rep Robert Lighthizer and China’s Vice-Premier Liu He. This is the first official bilateral talk between the two countries since the beginning of their trade war escalated under President Trump.
The stated goal of these talks is to reduce trade tensions, not complete a full-blown trade deal. On either side, there is a deep desire to address the increasing economic burden. Despite hopes sparked by the announcement, insiders are cautioning that hopes for a widespread fix should remain tempered. First, negotiations will be heavy on removing tariffs and mending strained trade relations. An important agreement is still probably months away at best and could need personal intervention by President Trump and Chinese President Xi Jinping.
Adding tension to this backdrop is a swath of retaliatory tariffs enacted by both countries. As of this date, the United States has imposed tariffs up to 145% on certain Chinese products. In retaliation, China has raised tariffs on American goods by 125%. Concerns remain paramount. Wrinkles remain to be worked out. The controversial issue of opioid fentanyl exports and potential new US-imposed tariffs remain major sticking points.
China’s entered the negotiations again after the US first signaled it might be willing to offer tariff relief. Surprisingly, Beijing reacted with restraint to this move. Chinese officials have already cautioned against any “coercion” in the talks, stressing the need to engage in the discussions seriously, sincerely and respectfully. Trust is an ever-looming concern in these negotiations. First, some analysts in China are openly skeptical about whether the US will honor any agreement signed.
These negotiations follow a dark chapter featuring damaging retaliatory tariffs. These tariffs have injected unprecedented levels of strain on the economic relationship between our two countries — the two largest economies in the world. As both nations inch forward through this thorny terrain, they try to discover some commonality between the sad history and entrenched misgivings.