[Washington, 14 Reuters]-President Trump praises the first stage agreement in China's trade talks as "the most wonderful and large deal ever," and China has up to $ 50 billion in agricultural production I was thrilled to accept the purchase. However, it was not officially agreed on in writing, leaving hundreds of billions of dollars in tariffs for Chinese products, and both countries are now worried that import duties will become a “new standard”.
The White House press conference hardly mentions this partial agreement, and the official statement from the Chinese government shows that the country believes that there is actually no agreement.
In the first place, according to the story of the person concerned, China's national-led economic model, which has become the core of the US government's dissatisfaction at the start of the trade war, contains few solutions in the partial agreement. Based on this model, China forces foreign companies to transfer technology, spends unfair subsidies, and encourages global production overcapacity.
On the other hand, Nathan Sheets, chief economist at PGIM Fixed Income, who served as Deputy Secretary for International Affairs at the US Treasury, pointed out that the US has found no flexibility in this matter. He pointed out that if a partial agreement is reached, the question is whether China will really impose a considerable level of tariffs.
According to trade experts and analysts in the Chinese market, it is highly possible that the US and China will not be able to meet the summit scheduled for mid-November due to individual problems. Also, even if the first-stage formal agreement is reached, China will not be concerned about the concessions needed for the more difficult second-stage, but rather will choose the one with higher tariffs from the United States.
Pacific Investment Management (PIMCO) Mohamed Ellarian described low growth and low inflation after the financial crisis as a “new standard” in 2009, but over the next 10 years, there is a fear that the world will last forever It came out. While the US imposes high tariffs on most Chinese products, and China pulls tariffs on most US products, it does not change China's fundamental behavior.
Scott Kennedy, a Chinese trade expert at the US Institute for Strategic and International Studies (CSIS), said the Trump administration has abandoned consultations in the meantime, although the partial agreement is sufficient for both countries to move forward for the time being. Expected to be unconstrained.
Until the start of the US-China trade war, the future of the global economy was very bright. Speaking at the end of 2017, just before the Trump administration implemented a comprehensive tax cut to promote investment and leverage growth, Europe emerged from the slump after the financial crisis, and the Chinese economy slowed down.
The International Monetary Fund (IMF) predicted that the global economic growth rate in 18 years would reach 3.7% in October 2017.
However, since the start of the trade war, China has imposed tariffs equivalent to a total of 110 billion dollars on imports from most of the US except commercial aircraft. The US has imposed tariffs of approximately $ 375 billion on imports from China, which is about $ 550 billion a year.
As such, IMF's new Managing Director Georgieva warned that the global economy had fallen into a “simultaneous slowdown” due to trade friction this month, and so far mainly through uncertainties that chilled investments and hurt the market. Said the tariffs announced in 2007 have pushed down global production by $ 700 billion. [nL3N26T4G3]
Similarly, the Federal Reserve (FRB) is also predicting that global trade will lose $ 850 billion, or 1%, due to trade friction.
On the contrary, in this partial agreement, the postponement of the trump administration's increase in sanctions tariffs for China, which was scheduled on the 15th, will only relieve the negative effect on global production by 0.1 percentage points, Oxford Economics said Estimated.
“The (Trump administration) can maintain that other tariffs are strong and will never succumb to China,” says David Dollar, a Chinese expert at Brookings Institution. The outlook doesn't seem to be that big. "
(Heather Timmons reporter, David Lawder reporter)