US President Donald Trump is a firm believer in personal relationships.
As a businessman he wants to meet the CEOs of his competitors face to face and size them up before getting into any serious negotiations.
It’s the same tactic he’s brought with him into the White House in dealing with North Korean leader Kim Jong-un and Russian President Vladimir Putin…among others.
But is Trump’s relationship with Chinese President Xi Jinping strong enough to help them back out of the flaring trade war?
Trump appears to think so. He says he will meet with Xi next month.
Dispute to blame for the market’s devastating loss
Clapping back from Trump’s sudden decision to hike up tariffs from 10% to 25%, China has announced they will hike up tariffs on US goods, such as frozen vegetables and liquefied natural gas — from 5% to 25%.
Following this move, the US Trade Representative’s office has said they planned to hold a public hearing in June discussing the possibility of raising duties to 25% on another US$300 billion worth of imports from China. This would include mobile phones and laptops, but not pharmaceuticals.
But what most Trump-siders would once call welcome news, the prospect of even higher tariffs may come with a fair amount of resistance from the public, as they begin to experience slight increases in China-imported products, such as children’s toys and pet supplies.
What shook consumers and economists even more in the last week was the prospect of what a no-deal dispute between the two world powers could do to the worldwide economy. This fear led to a terrified sell-off of stocks — a 1.9 drop on Monday, signifying the sharpest suffering since January.
According to AAP, the yuan fell to its lowest level in six months, and oil futures fell along with it.
The meeting we’ve been waiting for…and dreading
The next talk between the two leaders will most likely occur at the next G20 summit in June. Mr Trump has already described the impending talk as being a ‘fruitful’ one.
But as many as US farmers already start to feel the sting of the trade war, the pressure is on Trump to amend the damage. According to AAP, many are growing angry with the persistent failure to reach an agreement.
According to Reuters, soybean futures have hit their lowest level in a decade, which Trump has promised to assist, by reimbursing US$15 billion to those farmers whose products have been affected. Being a core political constituency for Trump heading into the next election, it’s a demographic he can’t afford to lose.
But as Beijing announces that they would ‘never surrender’ to extender pressure, the outlook is looking dim. Who will bow first, we can only imagine.
‘China’s adjustment on additional tariffs is a response to US unilateralism and protectionism,’ China’s finance ministry said. ‘[They hope] the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway.’
China’s tariffs will come into effect on 1 June.
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