US-China trade war: who wanted a deal the most? Just look at the concessions made by both sides

Washington offered one concession – deferring the October 15 tariff hikes – while Beijing backed down on US farm purchases, IP and tech transfers, financial market liberalisation, exchange-rate reform and an enforcement mechanism

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Chinese Vice-Premier Liu He (left) and Robert Lighthizer, US trade representative, wave to members of the media before a meeting at the Office of the US Trade Representative in Washington, on October 11. Photo: Bloomberg

Published: 3:00am, 23 Oct 2019Updated: 4:23am, 23 Oct 2019

Negotiation is all about give and take. And the party more eager to get a deal done will give more. That is why Beijing made more concessions than Washington in the just-concluded first-phase deal after their marathon trade talks.

Hopes were dim for any such deal in the weeks leading up to the 13th round of talks amid a number of controversies including: China’s quarrel over a National Basketball Association general manager’s support of Hong Kong protests; the passing of the Hong Kong Human Rights and Democracy Act in the US House of Representatives; the Trump administration’s reported discussions around possible restrictions on capital flows into China; the US blacklisting more Chinese tech firms; and a travel ban on officials linked to human rights abuses in Xinjiang.

However, the political turbulence did not deter negotiators from striking a deal, as both nations want to end the tariff war that is badly hurting their economies. Politically, both US President Donald Trump and his Chinese counterpart Xi Jinping also wanted a deal in the face of their respective unprecedented challenges.

Trump needs a quick deal to end the trade war that’s hurting American companies, farmers and consumers, and which will imperil his re-election chances. He also faces an uncertain political future amid an impeachment inquiry in the House of Representatives.

But Xi might be more eager for a deal as nothing in today’s Chinese politics is more important than economic growth and China-US relations – two critical and interconnected issues. Once the world’s fastest-growing major economy, China has lost momentum over the past decade, with a steady downturn.

Gross domestic product growth dropped to a record low of 6 per cent for July-September and is certainly heading below the political benchmark. Despite his unique status, Xi’s political credibility and his grip on power are at stake if he fails to manage both issues, given that Sino-US relations had been largely stable and the economy robust before Xi’s reign.