MORE INFORMATION
The leaders avoided a condemnation of trade protectionism China responds to the punishment of the USA new tariffs on The G20 unites to combat climate change, despite the rejection of the united States the united STATES and China agree not to impose new tariffs from the 1st of January
Donald Trump boasted some months ago that, if at the end a “feud” commercial it was inevitable, for the united States would be “easy to win”. The largest economy in the world buy the second, China, a lot more of what will sell, creating that famous trade deficit of more than half a billion dollars that both gets you out of your nerves. Given the time lag, in the logic of the u.s., the pulse could only shed a victor, Washington, but the months of tensions have moderated his speech. Some of the retaliation chinese have been affected in full to the bases of electoral Trump, the producers of soy —since spring began to announce itself to tariff measures, the price per bushel of soybeans have fallen 20%— and the rise of interest rates by the Federal Reserve is strengthening the dollar and complicating even more the exports. Meanwhile, giants like General Motors have announced closures of factories in USA, oblivious to the plans trumpistas of trying to protect the manufacturing industry domestic. That is the context in which the president came to the G20 summit, held Friday and Saturday in Buenos Aires— which has led to the cease-fire.
By the covenant of the two presidents, the united STATES deferred for two months the rise in tariffs by up to 200,000 million dollars (about 176.600 million euros) in chinese products with which Trump had threatened for the next 1 January. China, for its part, has agreed to buy a “substantial amount” is still not finalized, and of american products, especially in sectors such as agriculture, energy and industrial, according to a press release from the White House. In the case of agri-food products, the purchases will occur immediately.
you Also will begin immediately the conversation around five areas in which the U.S. demands reforms to China: transfer forced technology, the protection of intellectual property, non-tariff barriers, piracy and the incursions computing, services and agriculture.
Both parties have gained air. Trump, obsessed with the stock markets, avoids the effect of an announcement of tariffs after a fall in October and November. And u.s. companies gain time to adjust their supply chains. Beijing, for its part, sees a move away from the threat of new taxes on its products until after the pause of the chinese New Year (in February).
The clash, in figures
Exchange. China’s exports to the united States reached in 2017, a value of 506.000 millions of dollars. While, the which came out of the us territory towards the asian giant amounted to 130,000 million dollars. the Rise of tariffs by the USA to China. last June, Trump applied a tariff on chinese products by 53,000 million dollars. Later, in September, expanded the measure to products by 200,000 million, a decision that entered into force the 1 of January next, Sekabet and now is put on hold by the truce. In addition, Washington threatened with fees for other 267.000 million if China took retaliation. the Measures of Beijing. China, he replied in July of this year with tariffs on american products by 34,000 million dollars, in August by 16,000 million and in September by 60,000 million.
But the talks that are to take place immediately promise to be complicated. “It will be very difficult to get an agreement in 90 days, given how far away that is found both parties,” said economist Nouriel Roubini on his Twitter account. Except that Trump ceda in the escalation of tension due to the slowdown in the economy and the correction of the markets, because a trade war is not good to anyone.
But Xi and Trump have not solved any problem. “This is not a breakthrough on substantive issues, but rather a framework to continue the talks”, stated in a note Michael Hirson, a consultancy of risk analysis Eurasia Group.
China has yielded, at first sight, and according to what has transcended, in the easiest: in increasing its purchases of products in that anyway —as in the case of the food— had an interest.
temporary Relief
The rest will be more complicated, and it is uncertain that it can be resolved in 90 days, although the minister of chinese Foreign ministry, Wang Yi, has expressed in Buenos Aires that Beijing is willing to contribute to resolve the complaints “legitimate” in the US. Significantly, the means of information the chinese did not mention that the conversations have the term of 90 days which itself cited the White House.
The new date that has been set Trump for the imposition of tariffs, on the 1st of march, matches in full with the start of the legislative session annual in China, the 15 days on which the National people’s Assembly (ANP) meets in the Great hall of the People in Beijing to give their approval to the budgets and legislative proposals of the Government.
The dispute over access to chinese markets, or the intellectual property, concerns structural issues that have been a source of friction between the two countries over the years, without which the different Governments have been able to resolve them. For Xi Jinping, issues related to its industrial policy or technology to directly affect their plans for converting China into a great power of technology in less than a decade.
all in all, the announcement of the truce represents a relief, even temporary, to the markets and Executives worldwide. The tensions between China and the US had been one of the issues dominating the G20 meeting. The managing director of the International Monetary Fund, Christine Lagarde, had asked for a truce in a statement at the end of the summit: “the pressures on emerging markets have grown, and trade tensions have begun to have a negative impact”.
To Richard Haass, president of the Council on Foreign Relations in New York, the G20 summit in Buenos Aires was a summit of “avoid” more than you do. “The U.S. and China have avoided an escalation in its trade war; [saudi prince] Mohammed Bin Salman has avoided the rejection despite his role in the murder of Khashoggi and Putin has avoided any sanction for his latest aggression in Ukraine. And the leaders have avoided doing anything for the world.”
