U.S. and China negotiate commercial dealings
Geneva Showdown: US-China Trade Talks in Full Swing
It's a high-stakes game as the world watches the first commercial discussions between the United States and China since the initiation of the trade war under Donald Trump unfold in Geneva. The aim? To alleviate tensions that have been causing harm to the global economy's powerhouses.
The caliber of the attendees backs the importance of these discussions. American delegates include Treasury Secretary Janet Yellen, Trade Representative Katherine Tai, and Chinese Vice-Premier Liu He. The talks, taking place at the Swiss permanent representative's residence, have kept the press guessing since morning on Saturday, with no leaks in sight.
As the day progressed, the delegations reconvened after lunch, around 2:30 PM local time, according to AFP journalists. Negotiations continued into Sunday.
De-escalation Looming?
On the eve of the negotiations, Trump made a move by suggesting to reduce tariffs on Chinese products by 80%. However, at this level, tariffs would still be challenging for many Chinese exports to the United States. Since his presidency, Trump has used tariffs as a political weapon, imposing an additional 145% tax on Chinese goods, on top of existing tariffs. In response, Beijing has imposed 125% tariffs on American goods.
This has resulted in a near standstill of bilateral trade, causing market volatility. Therefore, these Geneva discussions are seen as a "positive and constructive step towards de-escalation," according to World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala.
Exports Show Potential Leverage
China might be coming to the table with an ace up its sleeve. Chinese Vice-Premier Liu He announced a 8.1% increase in China's exports in April, significantly higher than analysts' expectations, but American exports to China saw a nearly 18% drop. If accurate, this could provide China with an advantage in the negotiations.
Stuck at a Crossroads
The U.S. wants Trump to meet his counterpart Xi Jinping, forge an agreement, and let subordinates hammer out the details. In contrast, China prefers that all issues are resolved before a meeting between the two presidents. This discrepancy might cause delays and complications.
Experts are divided about the future of tariffs. Bonnie Glaser, head of the Indo-Pacific program at the German Marshall Fund, suggests that the discussions could lead to a suspension of most, if not all, tariffs imposed this year during the negotiations. However, Bill Reinsch, an expert at the Center for Strategic and International Studies, has doubts, reasoning that a return to "reasonable levels" of tariffs may be difficult to achieve.
From a broader perspective, these trade negotiations involve several key issues, including tariffs, de-escalation, economic leverage, and trade diversification. Potential outcomes include symbolic gestures, tariff reductions, navigating complex negotiations, and establishing long-term resolutions to the ongoing trade war. As the talks unfold, the world waits with bated breath.
- The trade discussions in Geneva, involving high-level delegates like Treasury Secretary Janet Yellen and Chinese Vice-Premier Liu He, hold political significance for the fundamentals of finance and business, making them part of general-news.
- The Geneva talks, aiming to alleviate tensions causing harm to global economic powerhouses, might lead to de-escalation as suggested by World Trade Organization Director-General Ngozi Okonjo-Iweala.
- China might be using exports as potential leverage in these negotiations, given the significant increase in Chinese exports in April compared to a drop in American exports to China.
- The U.S. and China find themselves at a crossroads, with opposing views on whether President Joe Biden should meet President Xi Jinping after subordinates have resolved issues or if all issues should be settled before the presidents meet.
- Experts are in disagreements about the future of tariffs, with some suggesting a suspension of most or all tariffs, while others question the possibility of a return to reasonable levels of tariffs.
