The United States and China Struggle to Negotiate

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With the Trump administration preparing for re-election in the upcoming 2020 race, the United States and China trade talks struggle to come through.

Just this week, United States President Donald Trump expressed his sentiments on Twitter. The US President said that the slowing economic growth of China is evidence that it is losing the trade war.

Trump posted on Twitter, “The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries…”

He added the reason why Beijing wants a deal is that numerous companies want to leave China for tariff-free countries.

Data on Monday was released by the Chinese government. The report was about the country’s quarterly economic growth.

According to the information presented, China’s economy has expanded 6.2% from the previous year. China’s retail sales and industrial outputs also rebounded in the month of June.

China’s economy may have expanded, the data showed that it is the weakest movement in the course of 27 years.

China is currently the second-largest economy after the United States; some economists are projecting that China will top the US by the year 2030.

Companies Leaving China

Tariffs from the United States have affected both Chinese, American, and other foreign companies. Beijing is currently scrambling to keep foreign businesses in their country.

After a year of taking hard blows by both giants, more than 50 companies are reportedly planning or considering moving out of China.

Huge companies such as Apple, Nintendo, Dell, and HP are amongst those who want to shift their production.

According to a report, Apple has set to move 15% to 30% of their production to India.

The Japanese-owned company, Nintendo, is looking to shift some of its video game console production out of China and into Vietnam. Asics, Kyocera, Sharp, and Brooks Sports will also relocate to Vietnam.

Nidec, Panasonic, Funai Electric, and GoPro will move to Mexico. Hewlett-Packard, Dell, Asus Tek are set to transfer in Taiwan.

Aside from international companies, the tariffs from the United States also pushed some Chinese enterprises out of the mainland.

GoerTek – a manufacturer of wireless earphones, and TCL – a manufacturer of televisions will move to Vietnam. The Chinese tire manufacturer, Sailun Tire, plans to shift to Thailand.

Back at the Negotiating Table

US President Donald Trump is complaining that Chinese President Xi Jinping is not complying with his promise.

After their meeting at the G20 sidelines, Trump said that China has promised to buy large volumes of agricultural goods from the United States.

However, China also claims that the US isn’t also complying with its side of the bargain. A Chinese official said that the US failed to remove the Chinese telecom company, Huawei, from the US Department of Commerce ‘entity list’.

According to a member of the Chinese delegation team that spoke with Trump’s team during the G20, Beijing wants the US to grant special licenses or permit to US-based companies that supply Huawei.

He added that as long as Washington doesn’t comply, Beijing won’t make such concessions on US agricultural goods.

Another factor that hinders the United States and China from making a successful agreement is whether the two parties will draft another agreement or resume previous talks that were dropped this May.

US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin are scheduled to talk via phone calls to Chinese representatives.

If the phone call goes well, the two American officials will fly to China to personally settle the negotiation.

 

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