After President Donald Trump announced tariffs on China, Canada, and Mexico, both Canada and Mexico retaliated with their own levies on US goods. However, China responded more mildly, stating it would take countermeasures to protect its rights and challenging the tariffs at the World Trade Organization.
Experts believe that Trump and Chinese leader Xi Jinping may see an opportunity for a deal, given their relationship and the shifting geopolitical dynamics. While the tariffs on Canadian and Mexican goods were significant, China has been dealing with tariffs since Trump’s first term. The decision to go to the WTO allows China to focus on the principles of global trade rather than escalating the situation.
Despite its slowing economy, China is in a strong position to negotiate with the US due to its larger GDP. The tariffs on Mexico, Canada, and China could have a significant impact on all economies involved, according to the Peterson Institute for Economic Affairs.
Chinese policymakers seem to believe that the tariffs will do more harm to the US economy than to China, leading to a cautious approach in responding to the situation. It has been reported that Beijing may propose reviving a trade deal from 2020, which could be a potential end goal for US-China negotiations.
Overall, while the trade tensions between the US and its trading partners continue to escalate, there could be room for diplomatic negotiations and a potential trade deal between the US and China in the future.
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