China Wins or Tariffs Coming? Three Signals from Trade Negotiations

21st Century: 中国坚持中美经贸谈判以双方相向而行、不打贸易战为前提
iFeng: 解析中美谈判最新成果 释放了三个重磅信号
Signal 1, the agricultural and energy sectors have become a breakthrough.

The Xinhua News Agency reported that the original words are:

The two sides carried out a good communication between the two countries in implementing the consensus in Washington and had achieved positive and concrete progress in various fields such as agriculture and energy. The relevant details are subject to final confirmation by both parties.
This is a win for China. It needs energy and food and can't produce it at home. This is pretty much a zero for U.S. trade negotiators. America could send the cows from Chik-Fil-A with signs that said "buy mor food and nrg" and get a deal.
As the article points out, Chinese want to drink more milk and eat more meat. American imports can keep costs lower. China wants more energy from the U.S. but could not get it. WaPo: China's Oil Bid Riles Congress.
Signal two, this is actually China's established strategy and constant rhythm.

For the recent Sino-U.S. game, there are some friends who have doubts: How can China only buy and buy? You see this time it is buying and buying.

However, in the view of bullpiano, buying, buying and buying actually shows the potential and charm of the Chinese market. This is also an advantage of China in the negotiations. The key is to see what we buy and how to buy it.

The Chinese attitude is consistent. In order to meet the growing needs of the people for a better life and meet the requirements of high-quality economic development, China is willing to increase imports from all countries in the world, including the United States. This will benefit both peoples and the world.

Following this, there is another sentence: Reform and opening up and expanding domestic demand are China's national strategy, and our established rhythm will not change.

Please pay attention to these key words: The attitude is consistent, the national strategy, the established rhythm will not change.
Again, China gives up nothing. It gives the U.S. what it was going to end up importing anyway as China's economy develops. Food and energy was always going to be a major American export to China. What is China actually getting here, since it was investing around the world to obtain agricultural and energy production? China gets to make the U.S. economy more dependent on it. In order to neutralize the United States as a threat, China wants to increase the trade relationship. China has bought off barbarians with similar strategies for centuries. It appears to be giving gifts, but once the counterpart becomes dependent, it has the power to dominate the relationship. Here's the three-step process as described by Edward Luttwak in The Rise of China vs. The Logic of Strategy
Initially, concede all that must be conceded to the superior power, to avoid damage and obtain whatever benefits or at least forbearance that can be had from it.

Entangle the ruler and ruling class of the superior power in webs of material dependence that reduce its original vitality and strength, while proffering equality in a privileged bipolarity that excludes every other power (“G-2” at present)

Finally, when the formerly superior power has been weakened enough, withdraw all token of equality and impose subordination
If President Trump and American negotiators think they have made any progress, they are as foolish and stupid as all the American negotiators before them.

The final signal is this "deal" offered to the United States requires the U.S. drop its trade war.
Signal three, please note that no trade war is a prerequisite.

In this regard, the Xinhua News Agency made it very clear:

The achievements reached by both China and the United States should be based on the premise that the two sides should act in opposition and not fight the trade war. If the United States introduces trade sanctions including the increase of tariffs, all the economic and trade achievements negotiated by the two parties will not take effect.

Righteousness, decisiveness, unambiguousness:

1. All achievements are based on the premise that trade wars will not be played.

2. If the US does not stop, then all the results will be blown.

Why it is so emphasized is because the outside world has doubts about the credibility of the U.S. government!

We must know that the last time in Washington, China and the United States had apparently reached a tacit agreement in stopping the trade war. Otherwise, U.S. Treasurer Mukuchin will not announce that both sides have agreed to stop trading wars. However, on May 29th, the White House suddenly issued a statement stating that it would still impose a 25% tariff on 50 billion Chinese goods. The specific list of goods will be announced on June 15, and tariffs will be implemented shortly thereafter.

We can think that this is merely a negotiating strategy for the United States to wield a big stick and exert pressure on China. However, this unexpected move will inevitably cause external worries. Should the Sino-U.S. trade war stop in the end? If the U.S. finance minister says it, then will the White House say that it will not change?

Therefore, this time, China’s attitude is very clear: If the US side introduces trade sanctions measures including the increase of tariffs, all the economic and trade achievements negotiated by the two parties will not take effect.

This is a firm position. China does not cause trouble and is not afraid of things. China also does not want Sino-U.S. relations to change. However, China has a bottom line. The Chinese side does have the confidence, ability and experience to safeguard the interests of the Chinese people and the country’s core interests.
If President Trump accepts this deal, it is a flawless victory by China. Given the short history of President Trump, I expect he will not accept the deal. Tariffs are coming.

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