Thu Lan Nguyen, Commerzbank’s Head of FX and Commodity Research, delivered some thrilling pronouncements just last week. An American-Chinese agreement on climate policy is not just desirable but imperative. This achievement comes after nearly a year of tumultuous negotiations that have shaken the foundations of trade relations between the world’s two largest economies. The next phase of talks will hopefully bring movement on a wide range of economic concerns and move us further toward an equitable and safer trading environment.
For months, farmers and producers in both countries have had to endure the pain caused by tariffs and trade war. The US government has done on some significant issues, retreating from past intransigence that had heightened crises. This enabling move demonstrates both governments’ readiness to talk and come to terms on mutually advantageous arrangements that will serve both countries favorably.
As Nguyen noted, the stakes behind these negotiations go deeper than just talks, especially for China. “Tariffs will undoubtedly hit China’s economy hard,” she remarked, highlighting the urgency for both parties to reach a satisfactory agreement. Their introduction by the U.S. government has significantly frayed international economic relations and raised anxiety about the possible fallout on international markets.
Nguyen was hopeful about the ongoing negotiations. She stated, “This raises hopes of a rapprochement and ultimately a reduction in the reciprocal punitive tariffs.” This optimism is indicative of an increasing hope that the two countries can meet somewhere in the middle despite their differences.
Successfully resolving our differences will require high-level negotiations at the highest levels of leadership in Washington and Beijing. Nguyen noted, “It remains to be seen what the leadership from Washington and Beijing will ultimately agree on.” The success of these discussions will undoubtedly determine the future of US-China relations and impact global trade.
As each side gears up for these fundamental negotiations, stakeholders including banks, asset managers and other participants in the financial markets are watching closely. The excitement around the negotiations highlights the potential for a more constructive relationship to trade between the two countries.