The timing could not be better

WSJ

The U.S. is pressing Beijing to fill in the details of a slew of trade and investment proposals Chinese officials have made recently, as the two sides try to resolve a trade battle that has rocked global markets.

Since President Trump and Chinese President Xi Jinping met in Buenos Aires on Dec. 1, Beijing has pledged to cut tariffs, buy more U.S. goods and services, ease restrictions on foreign companies operating in China and further open sectors for foreign investment.

But details have been scant. That has led to skepticism in the administration that the initiatives will lead to meaningful progress unless Beijing specifies the types of changes it will adopt, the schedule for implementing them and ways to enforce the pledges, said people tracking the talks.

The 90-day talks are due to wrap up on March 1. If no agreement is reached, the U.S. said it will boost tariffs on $200 billion of Chinese goods to 25% from the current 10%, potentially having a big impact on electronics, furniture, machinery and other U.S. industries that rely on Chinese imports. It could also deepen a slowdown in China’s economy, which would have broad consequences for global growth.

If we are even a little bit right about China’s economy (where corporate debt to GDP has doubled and household debt has tripled), the US can drive a hard bargain.

The administration’s silence about the 2008-style leverage mega-crisis confronting China (and the rest of the world perhaps, ahem) is perhaps revealing. No doubt Kudlow etc are in the know, but you hear nothing about this. Smart, if that’s the plan.

One Response to “The timing could not be better”

  1. feeblemind Says:

    re If we are even a little bit right about China’s economy (where corporate debt to GDP has doubled and household debt has tripled), the US can drive a hard bargain.

    But does the USA have a track record of driving hard bargains?

    One wonders if our negotiators have our best interests at heart?

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