https://www.chroniclesmagazine.org/the-eagle-and-the-dragon-destined-for-rivalry/
A new round in the U.S.-China trade dispute has started in earnest. Last Sunday (May 5) President Donald Trump tweeted that he would raise the current 10 percent tariff on $200 billion worth of Chinese imports to 25 percent. The President doubled down on his trade war threats with China early today (May 10), just hours after last Sunday’s decision went into effect. In addition he warned that he’d continue raising tariffs on Chinese imports if there was no agreement: the Chinese “should not renegotiate deals with the U.S. at the last minute.”
Only last week, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin sounded optimistic about the latest round of bilateral negotiations, with Mnuchin telling Fox Business that the deal was “close to done.” The Chinese then suddenly revised some of the key provisions of the 150-page draft agreement. Specifically they tried to soften the language on the theft of intellectual property, financial services, forced technology transfers, and currency manipulation. Lighthizer and Mnuchin were taken aback at the extent of the changes in the draft and on Monday told reporters that Chinese backtracking had prompted Trump’s tariff order.
The current talks in Washington between China’s trade delegation and U.S. officials nevertheless will continue. Trump’s team has a strong hand, while the Chinese may have overplayed theirs. The U.S. economy grew by an annualized 3.2 percent in the first quarter of 2019, easily beating market expectations and following a 2.2 percent expansion in the previous three-month period. By contrast, on a quarter-on-quarter basis, the Chinese economy grew 1.4 percent in the first quarter, compared to a 1.5 percent expansion in the previous period. It was the weakest quarterly growth rate since the first quarter of 2016. New U.S. tariffs could further slow China’s growth rate and jeopardize President Xi Jinping ambitious “Made in China 2025” program of economic, technical and scientific development. Right now China needs an agreement far more badly than the U.S.