Fight-truce-negotiation circle normal in Sino-US relation
By Yuan Youwei |
Updated: 2018-06-13 16:25
Yuan Youwei
On June 2, the US Commerce Secretary Wilbur Ross visited China and attended the third-round negotiation on Sino-US trade issue. With the conclusion of the negotiation, both sides announced that they were positive and forward-looking, but there were no tangible deliverables.
The prospect looks somewhat murky, giving media some food for speculation on the possibility of a trade war. I am cautiously optimistic about the outlook of negotiations and believe that the new normal of Sino-US trade relations will be the fight-truce-negotiation circle.
The current situation is challenging the Trump administration. So far the protectionist trade policy of the current US administration has disordered the global trade system and encountered pushback even from its closest allies. Those ill-conceived protectionist measures taken by the US include putting levies on imported steel and aluminum with tariffs and proposing 301 investigations (allowing the US president to take retaliatory measures) against China. Besides that, US President Donald Trump has been considering imposing 25 percent tariffs on imported automobiles rather than 2.5 percent now.
The US society, business and consumers have felt the repercussions of those trade policies and bear the brunt of it. Those countries which had tariffs imposed on their goods are angry and have levied counter-tariffs on some US goods. That is a big deal for US farmers, the majority of whose products are exported to those countries. Farmers in Iowa expressed their concern and wish that it would not last long.
Chinese Vice Premier Liu He (left) talks with US Commerce Secretary Wilbur Ross (center right) in Beijing on June 3, 2018. [POOL / Andy Wong]
Besides that, Republican senators believed these tariffs are a bad move and they proposed legislation to limit the president’s authority to impose them under Section 232 by requiring congressional approval of national security-designated tariffs. Under this circumstance, a trade war with China will definitely impair more US businesses, and will have an adverse affect on the Republican mid-term elections.
Some of Trump's domestic policies were controversial and generated opposition within the Republican party. The “zero tolerance” immigration policy is a typical example. To deter the trend of illegal immigration, the administration has not only enhanced the border security, but also adopted a family separation policy. It is reported that several hundreds of children, including toddlers, were taken away from their parents who were illegal immigrants. This inhumane and cruel policy triggered an outcry in the country and later protests were staged in dozens of cities across the US to express their anger.
More than that, the US media exposed that the Trump administration will adopt preferential policies to save the coal and nuclear power plants which are in financial crisis due to the lobbying of relevant interest groups. Another group of Republican congressmen petitioned to vote on immigration bills in Congress as early as next month and proposed that enhancing border security should be combined with the path towards citizenship for undocumented immigrants brought to the US as children, commonly known as DREAMers. Their stance is just the opposite to that of Trump’s.
Not all news is bad for Trump.
Though more and more Americans dislike Trump’s policies, his approval rating among GOP voters has jumped to 45 percent in May from 39 percent last December. It is worth noting that the US economy is in good shape and the unemployment has hit an 18-year low. The protectionist measures taken by Trump administration are well-received among conservatives and some conservatives assert that peace and prosperity prevail under Trump’s leadership. It demonstrates that Trump’s trade policies have won strong backing of conservatives at home. In the primary races, most of Republican candidates lean toward Trump in terms of their policies to win more support of GOP voters. A candidate in West Virginia claimed that he would be more “Trumper” than Trump. It seems that GOP party has become the Trump party. The Republican performance in the mid-term elections may not as bad as previously anticipated.
No matter what excuses the administration has used to justify its aforementioned policies, Trump is getting a lot of pushback from just about every country that he’s taking a tough stance against. Every country is concerned that if it caves in, the Trump administration will become more emboldened. At the same time, the world economy pattern has changed from that in the 1980s -- the US economy is not as dominant as that time and the US allies and China are not as vulnerable as Japan was in the 1980s.
A good economy is the key for Trump and the Republicans to win the mid-term elections. The Trump administration stands at the crossroads. The Chinese expressed a willingness of meeting each other halfway, and at the same time, warned that if the US imposes trade sanctions, the positive results that two sides have reached will not come to fruition. Chinese have shown their full commitment to conducting negotiations and have urged the US to refrain from a trade war. In domestic politics, Trump might win some credits for having a trade war with China. But from the economic prospective, he will put himself in a dilemma by doing so. So it is high time for Trump to think twice before taking any further action.
Yuan Youwei is deputy director of the Department of External Affairs, China Center for International Economic Exchange. The author contributed this article to China Watch exclusively.
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Yuan Youwei
On June 2, the US Commerce Secretary Wilbur Ross visited China and attended the third-round negotiation on Sino-US trade issue. With the conclusion of the negotiation, both sides announced that they were positive and forward-looking, but there were no tangible deliverables.
The prospect looks somewhat murky, giving media some food for speculation on the possibility of a trade war. I am cautiously optimistic about the outlook of negotiations and believe that the new normal of Sino-US trade relations will be the fight-truce-negotiation circle.
The current situation is challenging the Trump administration. So far the protectionist trade policy of the current US administration has disordered the global trade system and encountered pushback even from its closest allies. Those ill-conceived protectionist measures taken by the US include putting levies on imported steel and aluminum with tariffs and proposing 301 investigations (allowing the US president to take retaliatory measures) against China. Besides that, US President Donald Trump has been considering imposing 25 percent tariffs on imported automobiles rather than 2.5 percent now.
The US society, business and consumers have felt the repercussions of those trade policies and bear the brunt of it. Those countries which had tariffs imposed on their goods are angry and have levied counter-tariffs on some US goods. That is a big deal for US farmers, the majority of whose products are exported to those countries. Farmers in Iowa expressed their concern and wish that it would not last long.
Chinese Vice Premier Liu He (left) talks with US Commerce Secretary Wilbur Ross (center right) in Beijing on June 3, 2018. [POOL / Andy Wong]
Besides that, Republican senators believed these tariffs are a bad move and they proposed legislation to limit the president’s authority to impose them under Section 232 by requiring congressional approval of national security-designated tariffs. Under this circumstance, a trade war with China will definitely impair more US businesses, and will have an adverse affect on the Republican mid-term elections.
Some of Trump's domestic policies were controversial and generated opposition within the Republican party. The “zero tolerance” immigration policy is a typical example. To deter the trend of illegal immigration, the administration has not only enhanced the border security, but also adopted a family separation policy. It is reported that several hundreds of children, including toddlers, were taken away from their parents who were illegal immigrants. This inhumane and cruel policy triggered an outcry in the country and later protests were staged in dozens of cities across the US to express their anger.
More than that, the US media exposed that the Trump administration will adopt preferential policies to save the coal and nuclear power plants which are in financial crisis due to the lobbying of relevant interest groups. Another group of Republican congressmen petitioned to vote on immigration bills in Congress as early as next month and proposed that enhancing border security should be combined with the path towards citizenship for undocumented immigrants brought to the US as children, commonly known as DREAMers. Their stance is just the opposite to that of Trump’s.
Not all news is bad for Trump.
Though more and more Americans dislike Trump’s policies, his approval rating among GOP voters has jumped to 45 percent in May from 39 percent last December. It is worth noting that the US economy is in good shape and the unemployment has hit an 18-year low. The protectionist measures taken by Trump administration are well-received among conservatives and some conservatives assert that peace and prosperity prevail under Trump’s leadership. It demonstrates that Trump’s trade policies have won strong backing of conservatives at home. In the primary races, most of Republican candidates lean toward Trump in terms of their policies to win more support of GOP voters. A candidate in West Virginia claimed that he would be more “Trumper” than Trump. It seems that GOP party has become the Trump party. The Republican performance in the mid-term elections may not as bad as previously anticipated.
