Beyond 2018

Trade tensions

On Dec 1, the leaders of China and the United States reached a consensus on suspending imposing new tariffs and take measures to ease bilateral trade tensions, which started in March 2018 with the US announcing new tariffs against products imported from China.

? Expert: Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation

The consensus has, to a large extent, prevented the Sino-US relationship from worsening. There used to be worries about China and the US engaging in a "new cold war", but now those worries seem to have eased.

More important, China has realized all its goals in the consensus. According to a news release, the US' past order-like claim of "cutting US-China trade deficit by $100 billion" was given up, while the two sides agreed to narrow the trade gap by enlarging China's imports from the US, not cutting its exports to the latter. Neither has the US mentioned anything about China's own innovation plans.

In a word, the trade frictions seem to have been curbed in a way that benefits both sides, which has given China confidence that it can cope with any external challenges.

However, it is still too early to assert "Sino-US trade frictions have come to an end", because that is not the story. The US government has always had the bad habit of letting other countries pay for its own illness, and there might be more uncertainties unless it gives up that philosophy. China must be ready to deal with uncertainties that might emerge.