The news that US President Donald Trump may talk on the phone with Chinese President Xi Jinping this week has cheered up analysts in a number of countries, who give recommendations to citizens on where it would be more appropriate to invest. In Hong Kong, which serves as a gateway to China’s economy for many foreign investors, stocks on stock markets fell on Monday and jumped on Tuesday, recovering from the previous day’s losses. What does tomorrow hold and how will Washington and Beijing interact? Or will something happen that will pull down stock market indexes in many countries?
The United States and China are the two current superpowers, on whose relations much depends in the world. Some political scientists have hypothesized that Washington and Beijing could conspire and create a kind of condominium, the instructions of which would have to be taken into account by all other countries. Other analysts, on the contrary, predicted that the contradictions between Beijing and Washington would grow and then result in military clashes over the dispute over Taiwan or control over the South China Sea. Fortunately, neither of these things happened. The conflict has acquired a more prosaic phase. It’s about who should give more money to whom.
However, Trump, in his usual manner, decided to frighten those citizens in his homeland who doubt the wisdom of his tariff policy before negotiations with Xi, and at the same time tease American publications hostile to him. To bring them to reason, the owner of the White House painted a terrifying picture. Imagine what happens when America loses the ability to protect its market with tariffs, while others will still have these weapons in their hands. Then what will happen? The United States would simply cease to exist, the president argued. A bright prospect, isn’t it?
In other words, those who dream of impoverishing America should not be given any relief. Especially to a potential adversary who planned to overthrow America from the post of world hegemon.
But in practice, what happens if China is no longer allowed to enter the American market? Prices will rise for computers, solar panels, gadgets that allow you to regulate the temperature in homes, and other household appliances manufactured by the Chinese manufacturing industry, to which Americans are accustomed. This will hit the popularity rating of the head of the White House. Therefore, he wants to reach an agreement with Beijing. It is an agreement, not a compromise. No concessions. On the contrary, China, whose industry is suffering from overproduction of manufactured goods and is constantly looking for new outlets to foreign markets, must accept the conditions offered by the United States.
What are the prospects for the final settlement of the contradictions? The New York Times gives a rather pessimistic assessment of the future negotiations. She writes that China has rejected all of Washington’s promises. China on Monday said the United States had “severely undermined” the trade truce that had been reached earlier. This was a retaliatory blow to the accusation made by Trump, who said that China had completely violated the terms of the agreement on duties.
The Chinese Ministry of Commerce called Trump’s attacks on social media “baseless.” He made the accusation against China that China had not fully implemented the trade deal, which stipulated that the imposition of tariffs would be delayed for 90 days and other barriers to trade would be temporarily lifted. This was supposed to give both countries more time to negotiate and “prevent an all-consuming trade war.”
China, the document emphasizes, continues to comply with the agreement with full responsibility. And the United States is resorting to “erroneous practices.” In particular, they provide for restrictions on the sale of chip design software to China and a ban on American companies using artificial intelligence chips manufactured by the Chinese technology giant Huawei.
The Chinese department also criticized the Trump administration’s statement that it plans to “aggressively cancel” the visas of Chinese students, and also intends to carefully check their future applications for study visas. In summary, the Chinese ministry wrote: the American side, instead of thinking about its own steps, blamed China, increased the level of friction in the trade and economic sphere. This, in turn, has increased uncertainty and instability in bilateral trade and economic relations.
The tariff confrontation between the world’s two largest economies raises doubts about whether they will be able to reach an agreement by the end of the 90-day deadline.
But what is it that most annoys America about China’s course? It turns out that’s what. China has a near monopoly on the extraction of rare earth minerals. They are critically important for the production of automobiles, semiconductors, airplanes, and other vital goods. There is a danger that American companies will not be able to continue production without sufficient supplies of these minerals.
Jamison Greer, the U.S. trade representative who, along with Treasury Secretary Scott Bessant, negotiated the deal, said in an interview with American media that China was “slow to comply” with the deal. Therefore, the influx of some very important minerals has not reached the scale that American officials expected.
The deal was concluded on May 12 in Geneva. Under the terms of the trade truce, the United States reduced its tariffs by 30%, and China reduced its import duties by 10%.