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US and China put trade war 'on hold'

America has pulled back from launching a trade war with China that could have destabilised the global economy, by agreeing to put proposed tariffs on Chinese imports “on hold”.  US and China have agreed not to impose tariffs on each other in a trade dispute that had been sparked in part by IP concerns.  the countries’ pledge not to launch a trade war and instead to enhance trade cooperation is a “win-win choice as it can promote the high-quality development of the Chinese economy, meet the people’s needs, and contribute to the US effort to reduce its trade deficit”. The US has a $335 billion annual trade deficit with China, US had announced tariffs of up to $60 billion on China in response to China’s alleged IP violations. President Donald Trump signed a memorandum targeting China’s “economic aggression” and said the US has a “tremendous IP theft” situation which equates to hundreds of billions of dollars being lost on a yearly basis. after the Office of the US Trade Representative (USTR) conducted an investigation into China’s alleged violation of US IP rights, with Robert Lighthizer, the USTR, saying China has a policy of “forced technology transfer”, of requiring licensing at less than economic value, and of cyber theft, among others.

Historical precedents suggest the U.S. could re-engage with China on trade issues if it sees China dragging its feet on fulfilling its pledges. Moreover, the last three months have further exposed Washington’s concerns over China’s advancement in technology and its threat as a competitor, both commercially and strategically. It’s like a back pain that never goes away. It was a shock in the first instance it happened, but then life goes on as the most acute symptoms are addressed. The good news is that markets should learn to live with it and consider its impact more rationally.

Source: The Guardian

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