U.S. Refocuses as it Pushes China Trade Deal

|

According to two anonymous sources, the United States is reducing its demands that China curb its industrial subsidies as its policymakers attempt to come to a suitable trade deal with China. This request has long been one of the United States’ biggest goals for the trade talks, however, since the trade negotiations have recently stagnated, the U.S. leadership is rumored to be rethinking its priorities.

Since 2018, Donald Trump's administration has imposed tariffs over $250 billion worth of Chinese goods and threatened to impose more if China doesn't stop certain practices that the administration considers to be affecting the United States economic interests. Among those practices are industrial subsidies, forced technological transfers, and intellectual property issues. In response to the tariffs placed upon Chinese goods in the U.S., China implemented its own tariffs on imported American goods.

The Chinese government stubbornly opposes assessing its subsidy policy as it claims that the policy is an important part of the country’s industrial policy. The Chinese government gives subsidies and fiscal advantages to strategic economic sectors and state-owned firms and has strengthened its role in the economy.

According to the sources, the U.S. is now focusing on what they consider more achievable goals, like making the Chinese improve their policy on intellectual property issues or ending forced technological transfers.

The United States is aiming to reduce its trade deficit with China and to retaliate because of what they consider years of damage to its economy. The friction between the two sides of the conflict has been there for years, and the U.S. has already filed its complaints against the Asian power with the World Trade Organization (WTO).

Despite being somewhat cooperative, the U.S. remains unsatisfied with the way China has addressed its concerns. The United States has also complained about the Chinese unwillingness to disclose information about the subsidies they give and even the Chinese representatives claim not knowing the real scope of Chinese subsidies programs. Whether a deal can be reached without addressing Chinese subsidies remains questionable.

Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.