‘Battle for the 21st century’ as China and US | Australian Markets
US President Donald Trump’s high trade officers met their Chinese counterparts in London on Monday for talks aimed toward resolving an ongoing trade dispute between the world’s two largest economies.
US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are representing the US.
China’s Foreign Ministry stated Saturday that Vice Premier He Lifeng, Beijing’s lead trade negotiator, will likely be in the UK between June 8 and 13, and that a assembly of the “China-US economic and trade consultation mechanism” would happen.
National Economic Council Director Kevin Hassett on Monday stated that the US was searching for affirmation China would restore the flows of important minerals.
“The purpose of the meeting today is to make sure that they’re serious, but to literally get handshakes … and get this thing behind us,” Hassett stated.
He added that he anticipated it “to be a short meeting with a big, strong handshake.”
“Our expectation is that … immediately after the handshake, any export controls from the US will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters,” Hassett stated.
The talks come after Trump final week stated he had held a prolonged cellphone call with Chinese President Xi Jinping as each look to avert a full-blown trade conflict.
Diplomatic efforts by each side have ramped up after weeks of heightened trade stress and uncertainty after Trump introduced sweeping import tariffs on China and different trading companions in April.
Beijing retaliated, and a tit-for-tat escalation in duties ensued earlier than each side agreed in Geneva in May to briefly slash duties for 90 days and to facilitate talks. At the time, the US tariff on Chinese imports was cut from 145 per cent to 30 per cent, whereas China’s levies on US imports have been lowered from 125 per cent to 10 per cent.
China and the US have since repeatedly accused one another of violating the Geneva settlement, with Washington saying Beijing was gradual to approve the export of extra important minerals to the US, whereas China criticised the US imposing new restrictions on Chinese scholar visas and extra export restrictions on chips.
US press secretary Karoline Leavitt on Sunday stated that the London talks would concentrate on shifting ahead with the Geneva settlement, noting the two sides’ strategic pursuits in one another’s markets.
No fast repair
Analysts say the Monday talks are unlikely to make a lot progress in resolving disagreements and sector-specific tariffs focusing on a vary of strategic industries, starting from technology and important minerals to manufacturing and agriculture.
Rebecca Harding, chief government of the Centre for Economic Security, stated on Monday that China and the US “are locked in an existential battle at the moment”.
“There’s absolutely no other way of describing all of this, and this is about how data flows. It’s about information. It’s about AI. It’s about tech. It’s about defence too,” she stated.
“China’s rapidly expanding its munitions production at the moment. So it’s about how these two economies actually compete and survive in a digital world where nobody really knows what the power of the nation-state is.
“It’s much, much more than just about trade and what’s going on in that domain between the two countries. It’s about how they run their economies. This is only just starting and, effectively, it’s a battle for the 21st century,” she added.
Optimistic that talks are happening in any respect, Zhiwei Zhang, president and chief economist of Pinpoint Asset Management, stated that it might take months for trade tensions to be resolved.
“I don’t really have very high expectations for these trade talks … I doubt they will reach an agreement very soon,” he stated.
“There could be some resolution on specific issues, like a rare earths, for instance, China already announced that they will give some permits to foreign firms applying for imports. Now, those kind of a temporary solution, we might see some of that come out. But I doubt we will have a complete solution coming from this dialog in the UK,” Zhang added.
CNBC
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