By Winny Sun
This week, the Trump administration announced that it will not impose tariffs worth $200 billion on Chinese imports.
The extension of the March 1st deadline is a sign of progress. But as of now, a potential US-China trade agreement is still up in the air.
The two countries have been negotiating over a number of key issues, including currency manipulation, agriculture, and energy. According to Reuters, both parties had agreed to a ten-item list aimed at reducing trade imbalances, which involved China buying more agricultural and energy products from the United States.
The Chinese government had also agreed to improve intellectual property laws, and open up to foreign carmakers and financial services firms. China also promised to stabilize its currency, as some in the US government have suspected China of weakening its currency to offset the effects of tariffs.
Some areas, like cyber theft and digital trade, still require further negotiations. US officials have also complained about forced technology transfers, a controversial practice where foreign companies attempting to enter the Chinese market are compelled to share data and intellectual property.
Currently, it is also unclear how the final trade deal will be enforced. Chinese officials said they are willing to meet with the US government regularly, but there are no details regarding how the United States would respond if China does not keep its promises. Previous US-China deals to curb intellectual property theft have had some success, but have relied on voluntary Chinese cooperation.
A Chinese delegation came to Washington earlier this week to hash out the details of a potential trade deal. There were signs of progress, but no major breakthroughs. Negotiators are currently working on a 150-page document outlining the terms and conditions of the deal as Chinese leader Xi Jinping and President Trump aim to meet in mid-March to finalize the agreement.
Despite initial optimism, the recent failure of negotiations between Trump and North Korean dictator Kim Jong-un has “injected an element of uncertainty” into the US-China talks, argues Derek Scissors, an economist at the American Enterprise Institute. If Trump were to learn that China had played a role in the unsuccessful North Korea negotiations, he may walk away from the trade deal with China at any moment.
In fact, after the summit with North Korea fell through, Trump said he will discontinue the trade talks with China if necessary.
“I mean, I am always prepared to walk. I’m never afraid to walk from a deal,” he said. “And I would do that with China, too, if it didn’t work out.”