US, China to discuss trade deal amid COVID-19 disruption
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Negotiators from the United States and China will on Saturday discuss the “phase one” trade deal signed earlier this year — before the coronavirus slammed the world economy and relations between the two economic powers took a turn for the worse.
Washington and Beijing’s January deal represented a partial truce in their months-long trade war, and obligated Beijing to import an additional $200 billion in American products over two years, ranging from cars to machinery to oil to farm products.
But purchases of those goods have been lagging, while US President Donald Trump has stepped up rhetoric against China ahead of what’s expected to be a tough fight for a second term in the November elections, raising questions about the deal’s fate as well as the possibility of a second phase of the truce.
“The outcome of the trade talk will signal if both sides are willing to continue to keep the deal, which will signal whether the relationship will deteriorate further,” said Iris Pang, chief economist for greater China at financial services giant ING.
Neither the US nor the Chinese government confirmed the talks to AFP but the deal mandates meetings every six months after it takes effect, which would be Saturday.
Even with tensions high and both countries reeling from the shock of COVID-19 — which has caused a historic contraction in global growth and trade — analysts don’t expect the talks to produce major changes in the agreement. And if anything does happen, Washington would be the catalyst.
“Until now, China has been relatively passive and the United States has been relatively proactive,” said Raymond Yeung, chief economist for greater China at ANZ bank. “In my opinion, there shouldn’t be much change coming from China in terms of trade, cooperation or opening up the market, the key still lies in the US side.” (AFP)