Sino-US trade talks need to move on with pragmatism

Source:Global Times Published: 2019/5/12 7:00:50

Illustration: Liu Rui/GT

The US and China have just concluded the 11th round of trade talks in Washington. At noon Friday (Beijing time), the US increased additional tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, casting a huge shadow on the latest round of Sino-US trade talks. However, both sides agreed that the talks in Washington were constructive and continuable. Reassuringly, both sides have shown a willingness to move on with consultations and agreed to meet again in Beijing in the future.

During a media interview on Saturday, Chinese Vice-Premier Liu He, who led the Chinese delegation in the 11th round of high-level economic and trade consultations with the US, affirmed progress made in the Sino-US consultations. Liu also candidly shared the truth about the differences between the two sides on China's core concerns. They include whether all additional tariffs must be totally revoked if the two sides are to reach a deal, whether the amount of purchases should be realistic, and whether the wording of the agreement must be balanced and acceptable to the Chinese public without undermining the sovereignty and dignity of China.

China has made it clear that it will never make concessions on major issues of principle. China also announced that it will have to take necessary countermeasures against increased additional tariffs by the US. For the US side, using tariffs as a "big stick" has been an idiomatic action since the outbreak of the trade war last year.

It is an unprecedented situation in the history of international trade. On the one hand, China and the US have made new progress in trade talks; but on the other, trade tensions have escalated due to recent tariff hikes imposed by the US. China and the US are now adopting the mode of "fighting and talking".

The reason for this situation is that the US has made a fundamental misjudgment, that is, believing China is unilaterally benefitting from China-US economic and trade relations. They believe that as a trade war will lead to a one-sided loss by China or disproportionate losses between China and the US, they would easily force China to fully concede. The US has misunderstood the interests of both sides, and seriously underestimated China's endurance.

The misconception the US has should be corrected with China's consistent insistence on protecting its core interests. We believe in the basic law of economics and understand the determination and strong will of Chinese society to defend our legitimate rights and interests. We also firmly believe that because of the political system and social structure, China is in a much stronger position than other countries to weather the storm of a trade war.

The US side blamed China for putting up obstacles for the trade talks and said that China went back on its word. What the Chinese Vice Premier said has allowed the truth to come out. The truth is, Washington tried to bring up terms that either harmed the sovereignty and dignity of China, or that were seriously unequal and unrealistic. Those requests have made the negotiations more difficult. The US is spreading confusing messages by guiding Western media coverage, in which it is trying to shirk responsibilities for escalating trade tensions.

We believe that the decision made by the US to raise tariffs is overly impulsive, but the US knows that both the American and global public were hopeful about the prospects of China and the US reaching a trade deal. The US previously had released numerous optimistic messages to boost confidence of US investors before suddenly making a U-turn. Knowing it is hard to explain to the public, the US is trying to redirect the strong public dissatisfaction.

China is not interested in discussing which side is to blame for the sudden U-turn. Instead, China is looking forward. Upon the conclusion of the 11th round of trade talks, both China and the US told media that the meeting was "constructive." This shows that the current standing of both sides is different from what the concerned public regarded as trade talks breaking down. The difficulty in comprehensively defining the current situation is due to the complexity and uniqueness of the China-US relationship.

Washington has made frequent announcements since early Friday morning local time, but it is easy to tell that the announcements were made mainly to the American public for the purpose of shedding responsibilities and comforting the US stock market. If both sides stay in touch, there is still hope for expanding consensus in the future.

Most of the previous rounds were "half-truce talks" before the current shift to the mode of "fighting and talking." However, the mode shift will not change the basic premise of the trade consultations. In face of such a big country like China, the US should not have an unrealistic illusion that once the trade war intensifies, it will have more bargaining chips at the negotiation table. China's confidence and core concerns will by no means be weakened by tariff hikes. This is commonsense in international relations that the US needs to take into account.

China has shown its sincerity and willingness to resolve trade issues with the US through negotiations, and to establish a long-term stable economic and trade relationship that upholds the principles of mutual respect, mutual benefits, and win-win cooperation. China fully understands the US hopes to promote bilateral trade balances and is willing to take necessary measures to improve those balances between the two countries. However, the US also needs to embrace the idea that China's core concerns must be respected.

China and the US are the world's top two economies. Healthy and stable economic relations between the two will not only benefit both but will also lay a solid foundation for global economic stability. It is a compelling obligation for China and the US to meet each other halfway to resolve their remaining disagreements.

Newspaper headline: China-US trade talks need to move on with pragmatism, mutual respect

Posted in: VIEWPOINT

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