After the Biden-Xi summit, what followed the US-China trade war? | | Business and Economy

A meeting between US President Joe Biden and Chinese President Xi Jinping helped resolve the growing tensions between the two countries but did not go a long way in resolving US-China trade disputes.

The U.S.-China trade war, which began in 2018 under former US President Donald Trump, has forced all countries to pay higher taxes to import goods from the opposition country.

Rising inflation has led to the disruption of businesses and individuals around the world. But at the summit, which took place on Tuesday, economic issues returned to geopolitics.

Biden spoke briefly about China’s “trade and economic policies” that are hurting American workers, but in particular raised concerns about human rights abuses in Xinjiang, Tibet and Hong Kong, as well as American aid to Taiwan.

In his opening remarks, Biden told Xi, “It seems that it is our responsibility – as leaders of China and the United States – to ensure that competition between our countries does not get into conflicts, whether we want to or not. Simple, direct competition.”

Shehzad Qazi, executive director of China Beige Book International, described “direct competition” as “the best way to state that the US government does not want a war of attrition or conflict.”

“But in the meantime, the statement has been substantiated due to a lack of specific Chinese means,” Qazi said.

According to Trivium China analyst Joe Mazur, it is clear to the White House that Beijing will not move on a number of issues that are causing tensions between the two countries.

As a result, instead, the US is looking for areas that can slightly support bilateral relations with China and re-establish relations with its international partners.

“This is a major departure from Donald Trump’s foreign policy on ‘America First’, which seeks to get the United States to take over China without trying to find areas of interest to Beijing,” Mazur said.

“As part of this new approach, Washington is focused on curbing China’s economic influence by strengthening its trade and infrastructure strategies. , Beijing, or both. “

At the meeting, Biden called on China to release oil reserves to help stabilize global electricity prices, the South China Morning Post said on Wednesday, citing an expert on the issue. China was “open” to the idea but did not submit the request, a Hong Kong newspaper reported.

In January 2020, Trump and Xi signed the first phase of trade, which seeks China’s economic transformation and economic transactions, transfer of technology, agriculture, economic activity, finance and foreign exchange.

The agreement also called on China to commit itself to increased US agricultural exports, industrial, environmental, and labor in the coming years.

National security

However, last year, China failed and bought about 60 percent of the items it agreed to under the agreement. The Biden government will adhere to the first phase agreement and hopes Beijing will live up to its trade promises.

“The White House has already announced that in terms of trade, it is looking to monitor China’s performance in the first phase,” Qazi said. “In addition, we are aware that there is an internal pressure from US National Security Advisor Jake Sullivan to launch another 301 investigation into China that could lead to higher prices. what’s happened. “

Although Biden did not focus on the economy, Xi raised the issue of trade, persuading American businesses and urging the US to stop promoting the idea of ​​”national security” to oppress Chinese businesses.

Xi, who described Biden as “my old friend,” likened the two countries to ships that should sail on the sea without collision and said the two countries “should respect each other, live together peacefully, and pursue a successful alliance”.

Xi also issued a statement resting on trade restrictions to help speed up the recovery of all assets.

“There may be something so far – in particular, lowering or lowering prices could help reduce short-term inflation, a political thorn in the side of the Biden government,” Trivium China analyst Taylor Loeb said.

In January, a study by the US-China Business Council found that trade war destroyed 245,000 U.S. jobs, while lowering the price target on both sides would create 145,000 jobs by 2025. The Oxford Economics report also predicted a “significant reduction.” In the coming years, the economies of these countries will reduce the US economy by $ 1.6 trillion.

Rising Tit-for-tat prices by US and China have led to higher prices [File: Tim Rue/Bloomberg]

Loeb said the reduction in prices could come at some point, but not immediately.

“The United States will cut taxes in areas that it feels are more economically viable and less vulnerable to national security,” he said.

“The truth is that we are at the beginning of a major global revolution. The current crisis has a lot to say about the epidemic, but even though Covid is in the past, one-time global push for self-reliance and ‘security’ – led by US and China – will be heavier. in retail chains. ”

No agreement was reached at the end of the three-and-a-half-hour meeting. Instead, each government made its own statement emphasizing the long-standing grievances without expressing disagreement.

“Indeed, the summit has not changed much in the US-China economy,” Loeb said. “The US is still working on how it wants to articulate global trade policies that reduce reliance on China. Beijing is doing the same, but in the meantime it wants the trade relationship to return to the pre-Trump status quo. That is not happening.”

While it is yet to be determined whether the conference will translate directly into the economy, Mazur believes it is possible.

“It is not yet clear whether Washington intends to reduce Beijing’s trade deficit, especially since China is still lagging behind in terms of commodity prices under the first phase of trade,” he said.

“However, economic and trade cooperation seems more like an opportunity now than it was a few months ago.”