US-China trade wars could end soon
Over the past few months, the US and China have engaged in tit-for-tat tariff increases that have helped exactly no one. As even President Trump appears to be grasping the destructive force of these trade wars, tensions could be easing at last.
In talks between high-ranking US and Chinese officials, the US agreed to lift most of the US tariffs as long as China improved its protection of intellectual-property rights and followed through on its promises to import more US-made products.
According to reports in Automotive News, one of the remaining issues that need to be resolved is whether the tariffs would be lifted immediately or whether this would be spread over a period of time, allowing the US to verify whether China sticks to its word.
In return, China is reported to be offering to lower tariffs it has imposed on pharmaceutical, chemical, automotive and other products. It has also pledged to buy $18 billion-worth of natural gas.
Sources told the Wall Street Journal that China is also promising to speed up the timetable for removing foreign ownership limitations on car ventures and to reduce tariffs on vehicles imported into China to below 15%. The Journal also reported a summit could take place at the end of March during which President Trump and Xi Jinping could sign a trade deal.
In an apparent attempt to avoid throwing a spanner in the works, Trump has delayed a planned increase of tariffs on Chinese imports from 10% to 25% that was supposed to take place on 1 March.
“The US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” Trump tweeted at the end of February. “As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1.”
As diplomacy appears to be fixing what Trump’s short-sighted policy decisions had sparked, the threat of escalating trade wars with Europe are still looming over both the European and America car industry.
Image: President Xi Jinping (left) and President Donald Trump (right)