Hopes of an agreement that would bring to an end a long-running trade war between China and the U.S are diminishing by the day. Just as it has been the case in the past, the two economic powerhouses continue to hold firm their ground, refusing to cede any ground.
U.S-China Trade War
The two have already provided a glimpse of what to expect ahead of high-level trade negotiations on Thursday and Friday. A move by the U.S to impose travel bans on Chinese officials over claims of abuse and detention of Muslim minorities has all but dented hopes of a trade war agreement at the end of the week.
It is also becoming increasingly clear the U.S is engaged in a tech war in addition to the trade war with China. A move to blacklist Chinese tech giants focused on emerging technologies such as artificial intelligence is already ringing bells as to what the trade war is all about.
While President Donald Trump has always cried foul of the trade imbalance between the two countries, the blacklisting of Chinese tech giants signals a hidden agenda. The U.S is highly concerned of the way China is increasingly becoming a dominant force on new technologies, poised to shape the world in the future.
The U.S wants to restrict Chinese access to U.S technologies at all costs. This is one of the reasons why Washington has, in the recent past, blocked’ investments into U.S tech companies by Chinese companies. The U.S has also barred Chinese firms from buying components from U.S companies without government approval.
Capital flows into China by U.S government pension funds are also on suspension is seen as one of the measures Washington is using to force China into an agreement. While China has also hit back, its measures have not been stringent as those propagated by Washington.
Fading Trade War Agreement
Prospects of a breakthrough in the U.S-China trade talks are unlikely, as Trump has so far reiterated he is not ready to agree to a partial agreement. The likelihood of the U.S rising trade tariffs to 30% from the current 25% on $250 billion worth of Chinese goods is becoming increasingly clear ahead of the much-awaited trade talks.
It’s accurate to say that the world should brace itself for an open-ended trade dispute between the U.S and China as neither party is ready to cede ground and pave the way for an agreement.