Disengaging is not just bad for US and China but also for the world
As China and the United States enter talks to head off a trade war, both sides believe they are in a strong position. But such confidence should send warning signals to the global community
Until now the defining event of 21st century trade was arguably China’s entry into the World Trade Organisation, with American support.
Seventeen years later, the two nations have begun talks in Beijing to head off a trade war that could determine the future of the international trading system.
The United States has sent a high-level team of President Donald Trump’s trade and economic advisers, mostly hardliners on China. Beijing is responding in the same spirit, officials ruling out American demands for changes in its industrial policy or concessions on the bilateral trade deficit.
Both sides are taking tough stands. Each side, not to mention the world economy, has more to lose than to gain from failure to bridge their differences.
The road ahead will be difficult. Reining in the trade deficit is relatively easy, if the will is there. But there is a perception that on the US side different people push different agendas.