Amid all the tariff kerfuffle, the United States and China are set to meet this weekend in Switzerland to begin trade talks. The basis around President Trump's 145-percent tariffs on the Asian nation are simple. They have taken advantage for years of the U.S., and it is time to get our fair share. China has said they will come to the table. But as anyone in the Western world knows, trusting China comes at your own risk.
No one is expecting a deal to be done this weekend, as the Chinese are sure to have a load of demands. But even when a deal gets done, trusting the nation will follow through is another story. China for years has gone against the grain and taken advantage of other countries. They continually say they are doing one thing, then do another. There is hope for some progress, but do not expect it to be a pretty conversation.
Josh Birenbaum, Deputy Director of the Center on Economic and Financial Power at Foundation for Defense of Democracies, says progress is going to be slow, and it is a long row to hoe.
"I would expect that if a deal does get done, it will take several months," he says. "The number of details that need to be resolved between these two countries is a very long list."
To put it simply, the situation for both the U.S. and China is untenable. The U.S. does rely on Chinese imports heavily, with many major corporations using the country as their place for production. But the U.S. has been raked over the coals for years on the trade deal between the two, and President Trump's aim is to fix that.
China, meanwhile, is in a bigger pickle. While the U.S. somewhat depends on China, China is entirely dependent upon the U.S. being in need of what goods they are producing. We are not talking cheap toys or little things, either. They have expanded to provide major items, but if the U.S. can get them elsewhere, the Chinese are up a creek with no paddle.
"China desperately needs the U.S. markets to sell the types of goods it seeks to build," says Birenbaum. "If China is planning to focus on electric vehicles and solar panels, they are going to need the U.S. cooperation, which gives the U.S. tremendous advantage in negotiations."
President Trump is holding all the cards in this situation, and among all tariff battles. We have the production capabilities and population to sustain ourselves, if necessary. Other countries need the U.S. more than the U.S. desperately needs them. China falls into that category.
That is not to say we do not need China, especially when it comes to things like EV's, solar panels, and cell phones. But for the first time in multiple decades, the U.S. has bowed its neck up to China, and now they face the proposition of losing a huge chunk of their GDP.
But trade is not the only issue that the U.S. needs to focus on in these talks. China for years has been hacking our systems and stealing our technology. That needs to be embedded within any deal to stop them.
"Things like stealing American intellectual property, using monopolies, and using massive subsidies in ways that push American competitors out of business," Birenbaum says.
Birenbaum adds that trusting China at their word has to be backed up with cooperation mechanisms, to make sure they stick with whatever the agreement might be.
President Trump has said positive negotiations are continuing with other countries, but China has always been the whale. Whether we can trust the Chinese is anyone's guess. But if this deal manages to get done, it could be the beginning of the economic boom on which President Trump campaigned.
The two sides will meet in Geneva this weekend, with Treasury Secretary Scott Bessent heading up the discussion.
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