Donald Trump was right to surmise that the direct Chinese US discussions on trade issues between the two nations would not bare fruit. Just a couple of days after his pessimistic projection, the talks have broken up without any agreement emerging. This means that both sides are likely to ratchet up tariffs placed on each other’s goods making them more expensive to consumers in both nations.
The talks, according to The White House, had been on “how to achieve fairness, balance and reciprocity in the economic relationship”. It is probably fair to assume that the Chinese position was that that was the status quo ante the US decision to impose tariffs on them. Thursday saw the next raft of US tariffs applied to Chinese goods, affecting a further $16 billion worth of goods. It was surely only a matter of time until China replies in kind, so it will surprise nobody that they applied mirrored tariffs on US products to the same nominal value. This means that US exports to China become more expensive to Chinese consumers.
The recently concluded talks were the first to be held since June. The Chinese said that the talks had been “constructive and candid” and that: “both sides will keep in contact about future arrangements”. The White House stated that the talks had included “addressing structural issues” in China. Previously, the boss had claimed that he wanted to stop the “unfair transfers of American technology and intellectual property to China” which he said would protect US jobs.
The US Trade Representative’s Office has heard testimony from US businesses that their businesses are being harmed by President Trump’s current trade policies. Exporters to China face obvious problems, due to Chinese retaliation, but businesses which rely on importing Chinese goods for resale in the USA are also being hard hit.
China has already filed complaints with the WTO over US actions and is set to make further filings. The USA is legally bound to adhere to WTO rulings.