America And China Must Refrain From Politicising Trade Talks

The public face of the trade war between the US and China has been highly politicised. This was inevitable from the get-go due to the actual and potential impact of the trade war on both societies and likewise due to the fact that the trade war was launched as part of Donald Trump’s major policy shifts in Washington as opposed to being brought about by some dire economic necessity. As such, Donald Trump has used the trade war to promote American self-sufficiency whilst China has used the trade war to further bolster long standing policies of promoting global connectivity among Belt and Road partners which include many emerging markets looking to gain greater sovereign leverage against global economic trends that had hitherto been dominated by developed western economies.

That being said, when the political veneer is stripped away, the trade issue comes down to the world’s two largest economies finding some sort of common ground that will allow both sides to open up a new era in trade that both sides are able to cast as a win-win development. The recent trade talks in Shanghai did not provide any major breakthroughs but this can only be viewed in a negative light if one was expecting some sort of Hollywood happy ending to occur in the middle of what both sides admit will be a protracted period of discussion.

Inversely, the fact that neither side has walked away in frustration means that the reality of protracted talks is now sitting comfortably enough with both Chinese and American trade officials. Early indications are that China will increase its purchases of US agricultural products which in many ways is as good a result of the late July trade talks as one could have hoped for.

One of the major setbacks in the trade talks thus far has been an element of miscommunication in which both sides have had difficulties separating the public rhetoric of the other country from the actual goals that both sides privately harbour. Insofar as this is the case, Trump’s Tweets and patriotic Chinese opinion pieces in newspapers should not be seen as attempts to “psych the other side out” but should instead be read of indications of inevitable and in many cases healthy nationalistic moods on both sides.

If the difference between public rhetoric and private pragmatism can be successfully compartmentalised by the trade negotiation teams, a much more successful conclusion can eventually be reached. Both China and the US have proved that their economies are strong enough to weather the trade war. For China, the goal of pivoting away from a mass production economy and towards a high quality economy has if anything accelerated during the trade war. For the United States, Trump’s plan to create a more robust domestic economy has likewise progressed on a generally positive trajectory.

Because of this, both sides can afford to take a calm approach to trade talks so that when a conclusion is reached, it is one that can sustain a prolonged new era of China – US relations based on a win-win understanding of trade that itself is compartmentalised from other areas of dispute between the two superpowers.

Comments are closed.