One year in, US-China trade war is the ‘first sentence of the first chapter’ of a new superpower rivalry
- Donald Trump and Xi Jinping seem increasingly entrenched in their positions, 12 months into their bitter trade war
- Experts describe a ‘chaotic’ year, where widespread use of tariffs has opened a Pandora’s box on what was previously out of bounds in global trade
A year after the beginning of the tit-for-tat tariff war that has upended the global trading system, few trade experts see the US-China relationship improving any time soon.
Instead, companies are being advised to dig in for the long haul, with the way ahead packed with volatility, hot-tempered tweets and tariffs galore. Rather than progressing towards a deal, and despite reaching a tentative truce at the G20 summit in Osaka last week, the United States and China seem are as entrenched in their positions as ever.
Beijing is insisting that as a prerequisite to a deal, the US remove existing tariffs on US$250 billion worth of Chinese goods. At the same time, it is difficult to see what China can do to placate a seeming unappeasable White House, short of tearing up its entire economic model – an outcome that few think is likely.
“I do not foresee a scenario right now where the United States would remove all the tariffs that have been implemented so far. I think they are too deep, and I think there are a lot of deeply rooted structural concerns that are going to make it really hard to remove those,” said Jon Cowley, a senior international trade lawyer at Baker McKenzie in Hong Kong.
“Right now, what I'm hearing is that China is keen to see what the United States is going to do about the designation of key Chinese companies on the Entity List, and then holding out on commitments to purchase American agricultural products until they get some positive activity on that front,” Cowley added, with the suggestion that even the low-hanging fruit of agricultural purchases are now not the quick win they were 12 months ago.
