US-China Deal Uncertain amid Trade Tensions and Tech Probes

It seems like the chances of US President Donald Trump achieving a quick trade deal with China is considerably small, as the reality of the situation may be more difficult than what it appears to be.   

In hopes of immediately reaching an agreement with China, Trump is sending Treasury Secretary 

Steven Mnuchin and possibly US Trade Representative Robert Lighthizer to the country within days to discuss US trade disputes.

The President stated that they have a very good chance of making a deal, though he gave no further details on the matter.

If negotiations between the two countries fail, the US will have to go on with the plan of enforcing tariffs on up to $150 billion Chinese imports, while China could impose tariffs on US soybeans, aircrafts, and more in return.

US crackdowns on smartphone makers ZTE Corp. and Huawei Technologies Co. Ltd. concerning sanctions being breach have escalated the conflict further as well.

If the past suggests anything, then that maybe that the China trip could turn out to be long on ceremony and short on results. When Trump visited Beijing in November, the deals he stated were mostly non-binding agreements that could take years to produce results.

In addition, the 100-day action plan on trade that was announced in 2017 appeared to have made only small contribution on tackling trade imbalances, while a two-way formal economic discussion has been suspended.

US-China Trade Feud

Concerns over a worsening dispute between two of the world’s largest economies have left markets on edge, with the International Monetary Fund (IMF) saying trade tensions threatens to weaken the strongest global upswing since 2011.

Business groups, such as the US Chamber of Commerce and a lobbying council representing major technology firms have been requesting Trump to steer clear of a prolonged feud that would potentially harm supply chains and increase prices for consumers.

Head of China research and former Treasury Department chief Michael Hirson stated that it is uncertain the US and China will be able to come up with a solution that would stop the tariffs from taking effect, seeing the credibility each has staked in showing resolve.

Hirson added that Beijing will not be making any sudden and immediate concessions, and that President Xi Jinping is confident in his political strength as well as determined to avoid vindicating Trump’s pressure tactics.

US Crackdown on Sanction Infringements

The banning of ZTE earlier this month has also added more fuel to the fire. Claiming that the Shenzhen-based company have breach a sanction agreement, the US government decided to ban the telecom group from purchasing essential US-made technologies for seven years.

China’s Ministry of Commerce said it would carry out necessary actions to protect the welfare of its companies.

Furthermore, the US Justice Department, according to two sources familiar with the matter, has joined two other agencies investigating Huawei for possible violations of its Iran sanctions and that the Federal Bureau of Investigation (FBI) has been examining the firm’s transactions.

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