US President Donald Trump is preparing to meet Beijing’s top trade envoy in Washington for the second round of trade talks. Last year, the heads of both the nations Donald Trump and Xi Jinping met in Argentina and agreed to negotiate in the hope of coming to a peaceful conclusion and ending the escalating tariff war. The second round of trade meets would be steered by US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.
Both the nations are currently going through the 90-day truce, which was declared in December and ends on March 1. Hence both the nations are under pressure to reach some agreement before the temporary truce ends.
Last year, the Asian country recorded its slowest growth in nearly 30 years, making the US trade talks a welcome development, while there is enough pressure on Trump and his group of advisors to crack the deal, especially after losing the ‘Wall deal’ followed by the unpopular shutdown at home front.
Some fear that recent charges against Huawei can affect the trade talks, adding further complications to the agreement. Huawei is the Chinese telecommunications giant, on whom the US Justice Department has pulled two indictments of stealing trade secrets, fraud, obstruction of justice and accused a top executive of violating US sanctions on Iran.
Speculators believe that given the complexity of issues, it is unlikely that the two-day trade meet will yield a final agreement.
But US Treasury Secretary Steven Mnuchin said on Tuesday that he expected “significant progress,” and noted the governments have another month left in the 90-day truce declared in December.
Stakes are much higher on the two of the biggest world economies as their decision is going to have a ripple effect on the global economy. The International Monetary Fund lowered its 2019 global growth forecast, stating that trade tensions could begin to affect financial markets, risking a more pronounced slowdown.
Trump has often blamed Beijing and many other countries for unfair trade practices that have resulted in the loss of hundreds of thousands of US jobs over the past two decades. To put pressure on Beijing, Washington levied tariffs on $250 billion in Chinese imports. Beijing responded by putting duties on virtually every product it buys from the United States or about $110 billion in exports. The trade war has not only affected these two economies but also global investment and trade markets. Hence there is greater pressure on the negotiators to reach an amicable conclusion.
It is said that if the two nations fail to reach a concord then Trump’s administration would double US duty rates on $200 billion in goods from China to 25 percent from March 2 onwards.