Rising US-China tensions dim hopes for the trade deal

rising us-china tensions dim hopes for the trade deal

After the US administration imposed a series of new sanctions on Beijing alleged of human rights violations, the possibility of a breakthrough in trade negotiations with China this week has become even worse. The US Commerce Department added 28 Chinese companies to its “entity list” on Monday night, preventing them from purchasing US products. These entities suspected of human rights violations and abuses of human rights in the campaign against the suppression of Uighurs, Kazakhs and other Muslim minorities, massive arbitrary detention, and high-tech surveillance,” the agency wrote in the Federal Register.

The next day after the movement, Secretary of State Mike Pompeo imposed a travel ban on government leaders and Communist Party officials, calling them accomplices of human rights violations. Chinese Ministry of Commerce spokesman replied that the United States should “stop immediately publishing irresponsible remarks” and “stop meddling in China’s internal affairs and eliminate related Chinese entities from the list of entities immediately.” The spokesman also warned that China would take “all necessary measures” to protect its interests. The intensification of tensions between the world’s two largest economies has resulted in Washington’s readiness to host a Chinese trade delegation headed by Vice Premier Liu He on Thursday to restart trade talks. Lack of progress in the negotiations will extend more than a year of trade disputes. Also, trade disputes have cut economic growth in the United States and around the world, while setbacks are increasing the possibility of new tariffs since July 2018.

Continued controversy with China has also reduced the prospects for US economic growth. A survey of business economists predicts a growth rate of 2.3% this year and 1.8% in 2020, well below the 3% annual growth rate promised during Trump’s campaign. The Trump administration has been intertwining the two (regular trade issues and security issues) points, sometimes using security-related sanctions against Chinese telecom giant Huawei to influence trade negotiations. While the latest security measures reduce the possibility of a full-scale transaction that ends a trade war, separating the two issues can lead to a successful, narrower operation.