Bilateral Peace Through Trade?
After years of mistrust, it seems the United States and China are starting to actually like each other more. Maybe this is all because of President Trump’s inaugural trade war with the Asian superpower which has a meaningful effect on the planet and people around the world. So, what could be behind the new relationship?
Honestly, a few things. One, both countries realize the only person truly capable of deterring the trade war is the president. Even though tariffs continue to be put on, the two can hardly lose. Two, the fact that China took the issue to the WTO and obtained exemptions, has also helped break the stalemate. In fact, it’s almost like the two countries are playing chess while the other player just throws punches at them. Third, China actually wants to resolve the issue and get back to business.
For instance, one country’s luxury factories have decided to pull plans to expand their manufacturing capacity, mostly because of reduced orders from China. Perhaps, they realized that if they kept expanding that would only make the problem worse.
Meanwhile, in the United States, the Trump administration recently won an international arbitration case against China’s national grid, which allows them to cut US exports of copper. Remember this as the two countries negotiate an end to the whole trade war, says professor Richard Feinberg.
If you ask Goldman Sachs CEO Lloyd Blankfein, the U.S. and China will avoid a nasty trade war. In fact, he doesn’t think these two countries will have a problem at all. At the least, he says, the two should avoid a tit-for-tat battle as they will never win the overall war for the economy.
But experts say that the two countries are learning from the recent tit-for-tat trade conflicts and that the United States and China are coming up with a negotiated solution to the issue.
It’s always great to see the two countries working together instead of going at each other. For instance, they are looking to recruit Chinese software engineers, as they say, to the solar energy industry, where the Chinese are selling solar panels to US companies but not the other way around. And there are more promises to come. For instance, Chinese reporters are reporting that Chinese manufacturers will set up a satellite production facility in Ohio so that their solar panel operations will be closer to their end users in the United States.
