China-US trade

 

The signing of a phase one trade deal between China and the US may not lead to phase two talks any time soon, while trade arguments, tariff threats and US investment restrictions on China will become the "new normal" over the longer term, a source with knowledge of the talks said on Wednesday.

"The phase one trade deal shows the two sides have reached a consensus at the moment. We can't expect that China-US trade friction will disappear simply because of signing a deal," a source close to the Ministry of Commerce (MOFCOM) told the Global Times.

Moreover, after the signing, the US will maintain 25 percent tariffs on $250 billion of Chinese imports, along with 7.5 percent tariffs on $120 billion of Chinese imports, according to the Office of the US Trade Representative.

Existing tariffs imposed by the US on Chinese goods will not be lifted in the short term, said the person close to the MOFCOM. But China has reiterated its stance that the US ought to remove all tariffs on Chinese products. 

They prefer to focus on the earnest implementation of the hard-won phase one trade deal before moving to the next phase of talks, the person said, noting that future talks will be more challenging, as they'll be closely connected to WTO reforms.

A day ahead of the signing ceremony, the US, Japan and the EU proposed new global trade rules - that they are intending to bring to the WTO - to curb subsidies they allege are distorting the world economy, with China a clear target, Reuters reported.

 "Whether an economic system is reasonable or not is measured in line with WTO rules, but the US only use standards that are conducive to itself. This is unfair. Unless the US makes compromises in this aspect, the two countries can't reach a phase two agreement," He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Wednesday.

He indicated that the US position is one of hegemony in demanding that China cut support and subsidies to its emerging industries. 

"Industrial and agricultural subsidies are common in the US, with media reports saying that Foxconn could get subsidies of about $400,000 per job for its new factory in the US. Hence, the US maintains double standards on China's industrial policies," He said.