Despite the calm following the announcement by US President Donald Trump and Chinese Counterpart Xi Jinping of a truce in the trade war between the two countries at the G20 summit held in Osaka, Japan, a final trade deal is yet to be signed, raising global concern. The Ministry of Commerce of the People’s Republic of China is demanding that the US ends tariffs raised on China to cease this ongoing trade war since March 2018. Economic tensions between the two countries aroused when the US Increased tariffs on Chinese exports, and the Ministry of Commerce in China says that for both sides to reach a deal, tariffs must be ended, noting that China’s position on this is clear and consistent.
Negotiations between the two countries collapsed in May after the US accused China of reneging on its commitments as $360 billion tariffs were recently exchanged while the initiative to resolve the dispute and revive the talks took place in Japan. A statement by the US president followed to impose new tariffs on Chinese goods, noting that he would take a more flexible stance on blacklisted Huawei.
The failure of China and the US to reach a binding and fixed-term deal has left the world fretting about global trade, investment and stock markets. Economic tension in global entities are attributed to unchecked globalisation, decisions of some economies of one-sided countries and spiked tariffs that overstress the productivity of economic giants, such as the US, China, India, Japan, Mexico and others. Moreover, political tensions, climate change, 5G technologies and other socioeconomic issues all impact industries, trade exchanges and global investments, igniting differences between the world’s economic giants and causing financial markets to plummet.
The world is keen today to have a clear and influential role in any global trade agreement and in international efforts to achieve global economic stability. This will achieve more development goals pursued by countries according to the United Nations data on sustainable development, thus promoting strong and balanced growth for the further development of all countries worldwide. The US and China decision to resume trade negotiations will certainly ease the economic dispute between both countries. The negative impacts of this trade war include global economic slowdown, decline in exports and imports value between the world’s large countries and lack of cooperation between international companies of technical and technological products, cars, large equipment and others. These issues need to respect intellectual property and trade secrets and the reform of all businesses that lead to protectionism around the world.
Chinese officials believe that China and the US have mutual interests and broad fields of cooperation, and should not fall into the so-called traps of conflict and confrontation. Today there are several risks facing the growth of global economy, and a solution between the two countries will stabilise global growth and a slight recovery in the global economy in 2020. Any unregulated trade dispute between two countries will damage global economic growth, reduce global growth and erode the confidence of financial markets, thus affecting the daily lives of individuals and their employment opportunities.
The next stage requires finding a common ground among countries in all their issues to achieve positive growth worldwide.
These efforts require bridging all gaps facing international tech and production companies, as well as developing policies and principles that reduce tax payments imposed on companies to enable them to offer more jobs and enhance productivity. This is contrary to the common belief that protectionism will earn countries billions of dollars, forgetting that the local consumer will pay any increase in the value of products and commodities. The Chinese are not keen to change their laws, as some companies are state-owned and have laws on intellectual property rights, markets and how to protect the labour force and the environment.