Ever since the US President Donald Trump announced tariffs on Chinese goods, people on both sides were worried about the effect this would have on the economy of both countries, and for a good reason. The tariffs were put in place in 2018 as a method of strengthening the domestic manufacturing and addressing China’s trade practices that the US sees as unfair. The trade war between the two economic giants has had significant consequences, but will it be over soon?
Both countries have strong reasons for trying to find a compromise. With the two strongest economies in the world stopping and limiting trade, the lack of products and services that should be available globally has led both countries into nationalism and isolation.
There are currently numerous rumors surrounding the possibility of reaching Phase One of the new trade deal. Trump’s idea includes removing the tariffs under the condition that China buys $50 billion worth U.S. farm goods within two years. It remains to be seen whether such an offer would find a favorable response.
Some experts and advisors on both sides have been pushing for the first phase of the trade deal to be signed in December. The US has a sort of ultimatum attached to it. Namely, if the deal is not signed by December 15th, China will be facing losses of over $150 billion in goods, especially electronics and other holiday goods.
Difficulties and Hurdles
There are several situations and political stances that are hindering the immediate conclusion of the deal. First of all, there is the presidential election in the United States, which means that the Chinese might want to wait and see who the next president is going to be. One could argue that there is little point in making a deal with one president and have to face another in a couple of months.
Another problem for the deal is the Hong Kong situation, with the police harassing the local populace and the authorities censoring the protests. The US stands against the oppression of the citizens of Hong Kong and that might make the deal impossible.
Last, but certainly not least, is the fact that the first phase of the deal would only include tariffs and imports, but the second phase would deal with copyright, industrial espionage, and other topics.
Will the War End Soon?
Both countries have their reasons for wanting to reach a compromise. One the other hand, both of them also have strong feelings about certain political situations and events, making them unable to see eye to eye.
This, paired with the fact that the US accused China of stealing technology and ignoring copyright issues, means that we are not likely to see the end of the conflict any time soon. On the other hand, there are a few cautiously optimistic individuals on both sides who believe the first phase of the deal will be finished next year.