Trump’s tariff threats to China seem to be having the desired affect. The President of China, Xi Jinping, has stated that his country’s tariffs on autos and trucks are too high.
Chris Macke the founder of Solutionomics, an economic policy services firm based in Los Angeles said, “We still have the most desirable market in the world, and it is about time we start leveraging access to that market to negotiate better trade terms. China’s willingness to make trade concessions proves those who were predicting trade Armageddon wrong . China’s 25% auto tariffs are highly protectionist when compared to the U.S. 2.5% auto tariffs.”
While at a business conference last Tuesday, Xi Jinping promised to discuss tariffs that are part of the U.S. priorities list, as reported by the Associated Press. This does not mean that the trade war with China is over, but it does seem that they have blinked and come to the realization that things do have to change.
The big problem being is how much a change China is willing to make and how soon. I say this because China filed a complaint with the World Trade Organization (WTO) challenging Trump’s tariff hike on imported steel and aluminum last month. The WTO will give both sides 60 days to reach an agreement, if there is no agreement by the end of the 60 days, China could request an arbitration panel hearing against the United States. By doing this Xi Jinping has signaled that he is serious about protecting his country and does not see everything the way we do.
Per the Los Angles Times Xi Jinping said that “Openness versus isolation and progress versus retrogression, humanity has a major choice to make. He said this at the Boao Forum for Asia, China’s version of Davos. “The trend of peace and cooperation is moving forward and a Cold War mentality and zero-sum game are outdated.””
In other words China does not want to fight the Cold War all over again and is somewhat willing to compromise its positions on trade. But I am hesitant to believe that there will not be serious consequences, at least in the short term. For the Chinese government has the upper hand in the flow of trade, they are not the one with a trade deficit.
I must agree that Trump is right that we must produce more products here in the United States if we want to remain a viable economic powerhouse. So my attitude is to wait and see just what moves both sides will make in the coming months. And try not to panic over the short term problems our economy might encounter.
That is my opinion- Jumpin Jersey Mike
