The trade contract with the UK was simple, China is becoming much more difficult
The trade contract with the UK was simple, China is becoming much more difficult
expectations and challenges
"I keep my expectations back. The tariffs are high and the tensions are also easier to impose tariffs than to withdraw," said Wendy Cutler, a former US trade negotiator and current vice president of Asia Society Policy Institute.
trade deficits and their effects
President Donald Trump loathes trade deficits - a situation in which the United States buy more from another country than they sell. In his eyes, this is a sign that America is "over -advised" and treated unfairly. Economists are, however, significantly less convinced of his argument.
Since China is the second largest economy in the world and a center for production, it is not surprising that the United States had the greatest trade deficit of all trading partners last year that amounts to almost $ 300 billion.
rising tariffs and the reaction of Chinas
Trump has therefore imposed the highest tariffs on imports from China, whereby the rates for most products start with impressive 145 %. China reacted by raising a minimum of 125 % to most US goods. The economies of both countries are faced with massive loads from the trade war, and the first effects are already noticeable.
Investors as well as many companies and consumers from both countries Hope to improve the situation Official dialogue between high-ranking US and Chinese government officials during Trump's second term in office with optimism. Nevertheless, the situation could deteriorate quickly.
trade agreements in comparison
Cutler expects finance minister Scott Bessent and the US trade officer Jamieson Greer, who meet on Saturday with the Chinese Vice Prime Minister He Lifeng, who will address trade agreements with the United Kingdom to show that "their politics works" and that other countries "have concerns about China".
However, it remains unnoticed that the few details of the UK agreement show that it is a relatively small success- if there is one at all . It was also an agreement that was comparatively easy to reach.This is also due to the fact that the United Kingdom had to negotiate much less because the tariffs on its exports start at 10 % - and even remain at this level after the "deal". Some cars from Great Britain benefit from lower tariffs, and the Trump administration implied that further exceptions are considered. Another positive aspect: The United States had a trade surplus of $ 12 billion with the United Kingdom last year.
"It is basically a balanced trade," Cutler remarked to CNN. In contrast, China is "a completely different caliber".
expectations of the talks
Hardly anyone believes that this first round of talks will bring the US and Chinese tariff back to the level before Trump's second term. This also includes Bessent, who said Fox News this week: "My impression is that the conversations this weekend will focus more on a de -escalation than on an important trade agreement."
Trump even openly said that he would not consider reducing the tariffs to bring China to the negotiating table. On Thursday, however, the New York Post , citing non-mentioned sources that the Trump administration is considering considering the tariffs for China up to 50 %-possibly already next week.
positive signs and realism
In this context, it is a positive sign that Trump explained on Thursday that he does not consider further increasing the tariffs to Chinese goods. "They cannot be higher. It is 145, so we know that they will sink," said Trump in the Oval Office after the announcement of the UK trade agreement.
The comments from Besser for Deescalation Cooked the eye of Susan Shirk, a research professor at UC San Diego School of Global Policy and Strategy and emeritus director of the 21st Century China Center. "What suggests this is that this decoupling, these extreme tariffs will go in the direction, either to zero or to a minimal level on both sides," said Shirk.
China's President Xi Jinping and his administration act more disciplined than in earlier conversations with the United States, which indicates that "they probably will probably not screw it up". "They are skeptical about Trump and will therefore act very carefully, which exerts the right pressure on President Trump," she added.
The best possible result
Cutler sees the best possible realistic result of the discussions at the weekend in the fact that both sides go home with “a process for another commitment”. Among them would be a possible telephone connection between Trump and XI of central importance.
Trump indicated that depending on the discussions at the weekend, he could consider a conversation with XI.
The worst scenarios
In contrast, there are no limits to the imagination when it comes to how bad these conversations could be and which measures the two governments could take as a result. Both Cutler and Shirk agreed that one of the worst scenarios of a repetition of the with could resemble the bidet governor and Chinese representatives.
This would have followed catastrophic for both sides, since the officials publicly attacked themselves and used sharp rhetoric in front of a numerous group of journalists who were invited, which was initially intended as a short opening speech.
"The worst thing that could happen would be a big escalation and the media are there to report about it," said Shirk. "Exactly such meetings should be avoided," agreed Cutler, who also worked as a deputy Uttr in the Obama administration.
Apart from the Alaska Reduction, the worst result would be, according to Cutler, that the USA and China "stake up its hard positions and do not find a common denominator to advance what the door would open for even higher tariffs.