Officials from China and the United States convened in Beijing on February 5-6, 2024, to discuss the challenging issues between the two countries. Trade and customs tariffs emerged as prominent topics in these discussions. These issues are garnering increasing attention as the United States presidential elections approach.[1]
The Chinese Ministry of Finance has stated in discussions where the country’s Economic Working Group convened that China objected to high customs tariffs on its exports, bilateral investment restrictions, and other limitations on trade and technology. At the same time, these discussions have been described as “constructive.” The Global Times has said that these discussions send a “positive signal” and that “this positive trend provides the assurance the international community needs amid increasing global challenges, despite ongoing disputes.”.[2]
The US Department of the Treasury has stated that US officials reiterated concerns about China’s industrial policy practices and overcapacity, and their impact on US workers and firms.[3] It has been noted that during the meetings in Beijing, both sides also addressed issues such as debt problems in developing countries, financial cooperation, and economic policies. The Treasury Department emphasized that “the United States seeks a healthy economic relationship that provides a fair competitive environment for American companies and workers, rather than separating the two economies.” It has also been mentioned that both sides have agreed to meet again in April.[4]
The dynamics between the two powers intensified in 2023, gaining momentum after President Joe Biden’s summit with Chinese Leader Xi Jinping in November in San Francisco, California. However, despite relative improvement in relations, they still exhibit a fluctuating nature. For instance, Biden has maintained many of the tariffs imposed on China by former President Donald Trump when he initiated the trade war in 2018.[5]
The meeting of the Economic Working Group marks its third meeting since its establishment in September 2023. Additionally, this meeting is the first to take place in Beijing. The Treasury delegation met with Chinese Vice Premier He Lifeng during their time in Beijing and conveyed the message that Secretary Yellen would like to visit China at an appropriate time.[6]
The recent trade negotiations between China and the US reflect efforts to address the challenges facing the two largest economies. These discussions could be seen as a step towards easing tensions in trade and technology between the two countries. However, it is yet to be determined how the outcome and impact of these negotiations will affect the global competition between Washington and Beijing.
First and foremost, concerns regarding China’s industrial policy practices and overcapacity should not be overlooked. China has rapidly become a significant player in global markets with its growing economy, global investments, and particularly its advancements in the industrial sector. This development is expected to significantly increase competition and contention in international trade, and indeed it has.
On the other hand, the United States’ tough stance on trade policy towards China is also noteworthy. In particular, the high tariffs and restrictions on technology transfer implemented during the tenure of former President Donald Trump reflect US concerns about China’s economic growth. While the US claims that these policies aim to protect American companies and workers, the situation could have broad implications for international trade.
While the negotiations are considered a positive signal, it should not be forgotten that bilateral relations remain tense. In particular, the existence of sensitive issues such as Taiwan could increase uncertainty in China-US relations and impact the outcomes of trade talks.
Following the negotiations, both countries’ efforts to balance their trade policies and economic goals could shape the future of international trade and economic relations. In particular, China’s efforts to sustain its economic growth and the United States’ desire to maintain its competitiveness reflect a long-term quest for balance between the two countries.
However, achieving this balance may not be easy. Deep disagreements persist, especially on issues such as technology transfer, intellectual property rights, and trade balance. Additionally, the conflict between China’s economic model and the US’s protectionist policies could lead to continued competition in international trade.
However, both countries’ willingness to cooperate in trade and economic relations could enhance the potential for future discussions and negotiations. Particularly considering the complexity and volatility of global trade, areas where China and the US can balance their mutual interests may be found.
In conclusion, trade negotiations between China and the US are significant for the global economy. The stability of economic relations between the two countries holds considerable value for the overall health of international trade and the economy. However, the long-term impacts of such negotiations remain a question mark.
[1] “China and US Hold Economic Talks as Trade Issues Heat up on the Campaign Trail”, Associated Press News, https://apnews.com/article/china-trade-us-tariff-treasury-yellen-1d8064023af8ce8820e4e73e61013345, (Date of access: 08.02.2024).
[2] Ibıd.
[3] “Top U.S. Treasury Officials to Visit Beijing for Economic Talks”, The New York Times, https://www.nytimes.com/2024/02/05/business/us-treasury-officials-china-visit.html, (Date of access: 08.02.2024).
[4] Ibıd.
[5] “US, China Officials to Meet in Beijing, Furthering Economy Talks”, BNN Bloomberg, https://www.bnnbloomberg.ca/us-china-officials-to-meet-in-beijing-furthering-economy-talks-1.2030895, (Date of access: 08.02.2024).
[6] Ibıd.
