The trade war between the U.S. and China may have become hotter this week, as the White House announced that it has cancelled a trade meeting with China that was scheduled for this week. Officials from the U.S. trade representative's office were set to meet with two of China’s senior vice ministers this week to try to resolve trade differences but the U.S. abruptly cancelled the meeting because of disagreements over intellectual property rules and how they would be enforced.
The White House told media that: "the teams remain in touch in preparation for high level talks with Vice Premier Liu He at the end of this month." In the event that Washington and Beijing fail to agree on a permanent solution by March 1, President Donald Trump has said he will reinforce punitive tariffs on approximately 50% of Chinese goods that are exported to the U.S.
The trade negotiations and the addition of tariffs on both Chinese and U.S. goods has been one of the biggest issues or 2018 and both countries have imposed tariffs on billions of dollars worth of each others' goods. The ongoing dispute been felt by the ordinary citizens of both countries and has roiled stock markets across the globe.
The White House put 10% tariffs on $200 billion of Chinese products in September and has threatened to increase the levy to 25% this year. In November, the two nations agreed to halt additional tariffs as they engage in new trade talks with the goal of reaching an agreement before the March deadline.
During negotiations in Beijing earlier this month, Chinese officials offered to boost imports from the U.S. for six years and said they would increase imports of U.S. goods by more than $1 trillion USD during this period. But according to U.S. officials, Trump wants more.
Joseph Lupton, global economist at J.P. Morgan said, "I would characterize the negotiations as generally moving in the right direction. Last week, China offered a fig leaf in lowering tariff rates and agreed to import a trillion dollars of U.S. goods by 2024."
Last week, as China announced a slow down of GDP growth in 2018, Trump boasted that his negotiating strategy was working and that even if Americans were paying more for Chinese products, it is worth it in the long-run in order to force China to make trade concessions.
Lupton from J.P. Morgan noted, "I think there's a lot of posturing going on. Trump's tweeting the China numbers are weak, they better make a deal quick. I think a lot of that posturing is what's taking place here but beneath the surface both sides see a need to get some sort of deal here. It's just a matter of spinning it as a win for the two sides."