What will happen with US-China tariff-for-tariff pitched battles?

by Rashmee

Posted on September 11, 2018



Donald Trump wants the ‘Made in China 2025’ programme to become the ‘Never Made in China’ scheme. Xi Jingping wants him to understand that changing China’s industrial policies is too big a project even for someone who is president-for-life.

Michael Schuman, who’s based in Beijing, says that fundamental disagreement sits at the heart of the trade dispute. “There’s no end in sight,” he says, for the tariff wars between the world’s two largest economies.

That sounds about right.

Mr Xi cannot, in conscience, stop leading his country onwards and upwards, to the dream of being rich, consequential and globally respected.

Mr Trump wants China to unspool its dreams and help America avoid its nightmare – of being a little less important and a little less rich.

But is the US president’s targeting of China’s industrial policies the way to go about it?

Mr Schuman says ‘no’, and offers this argument to support the conclusion: “Xi, though, has almost no ability to negotiate over China’s industrial policies. Not only are they too important to the government’s agenda, they’re very much connected to Xi’s larger political message.”

To back down on China’s plans for tomorrow would make Mr Xi look weak. Even though he doesn’t face elections, it would be too big a risk.

Especially in view of Mr Trump’s erratic behaviour.

Unsurprisingly then, the latest round of trade talks between China and the US offered  little in the way of comfort. No one said there was constructive negotiation. No one held out hopes of a quick resolution. Diplo-speak couldn’t get past the realities of the stalemate.

 

 


Rashmee has lived and worked in several countries in the past decade, including Afghanistan, India, Haiti, Tunisia, the UAE, US and UK

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