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An eight-month trade war looks like it’s finally nearing an end, and not necessarily because China is ready to bow to U.S. President Donald Trump’s demands.
Both sides are close to a deal that could lift most or all U.S. tariffs if Beijing follows through on pledges ranging from better protecting intellectual-property rights to buying a significant amount of American products, Jenny Leonard reports.
Trump and President Xi Jinping each have an incentive to avoid further tariff increases that may hurt the global economy. Xi doesn’t want to see job losses that could undermine the Communist Party’s legitimacy, while Trump has linked his success to the economy and stock-market gains.
The question now is whether Trump will lift penalties right away as China would like, or listen to trade hawks in his administration who want them in place until U.S. demands are met on structural reforms such as government support for state-run companies.
For Trump, any decision is a bet on his 2020 election campaign strategy. Given how global markets jumped today on optimism of a deal, Xi could walk away relatively unscathed.
Source: Bloomberg