Olga Ponomareva, Researcher at the Economic Policy Foundation, explained in a commentary for RT why China and the US temporarily mutually reduced tariffs and what to expect in the future.
According to Olga Ponomareva, the imposed tariffs had a negative impact on the companies of both countries, which became an important incentive for the launch of negotiations. “The tariffs demonstrated the rigidity of the US and Chinese positions in the issue of mutual foreign economic pressure, showed the short-term effects of such cardinal measures and formed the ground for the development of negotiations. Temporary reduction of tariffs is, of course, only the beginning of the process, if the parties are seriously aimed at resolving the foreign economic imbalances of bilateral relations developed over the past decades,” the expert noted.
At the same time, Olga Ponomareva emphasized that it is still too early to talk about the settlement of the US contradictions with its trading partners. According to the expert, negotiations between the countries require time due to the wide range of claims of the US against China. “It is enough to recall the first stage of the US-China trade war, when negotiations were also announced at the end of 2018, and new tariffs followed in the spring of 2019. Negotiations with China take time, as many issues are sensitive for both countries: these include technological interaction, protection of intellectual property rights, price regulation, currency policy, and state subsidization of Chinese companies. The range of US claims against China remains wide, which will definitely affect the development of the upcoming discussions,” the expert explained.
Short-term fluctuations in the world markets are not excluded in the event of a new round of escalation, Olga Ponomareva concluded.
