China and the United States declared a truce in their current trade conflict . Consequently, this has lightened tensions, stopped the immediate threat of the United States tariffs on China’s goods plus cheered stock markets.
Long-run Picture Might Not Be Bright
The outcome of the talks has made the supporters of Trump's American First policies upset, left key differences untouched plus kept alive the possibility of a disastrous trade war between the two biggest economies in the world. A vague statement that the two nations released stated next to nothing regarding the subject at the heart of this conflict between Beijing and Washington: the hardball tactics that China uses in challenging the technological supremacy of the United States. The tactics include trade secrets, outright cyber theft and demands that companies in the United States relinquish some of their technology to get access to the market in China.
In exchange for the US concurring on holding off on tariffs on a maximum of 150 billion dollars in Chinese goods, Beijing agreed to substantially reduce the huge trade deficit of the United States with China. However, Beijing didn't make any specific commitment.
The declaration of Steven Terner Mnuchin, United States Secretary of the Treasury, that the American tariffs were going to be suspended contributed to heaving a sigh of relief in global markets thinking that the two nations had pulled back from the brink.
Beijing declined to give in to the demand of the United States to slash the trade gap by a particular amount: 200 billion dollars, a figure that is regarded by most economists to be wildly unrealistic. Last year, the United States reached a deficit with China in terms of goods and services of 337 billion dollars.
According to the Syracuse economist Lovely, The United States was distracted by a focus that is unwise on the trade deficit. Chinese, who have always had their technology to defend, could be making intellectual-property protections stronger and put pressure on local governments to stop asking for technology transfers. Trump is dispatching Wilbur Ross, the Secretary of Commerce to try and settle the details sidestepped in the talks with a delegation from China led by Liu He, the vice president.
Some analysts are saying that for now, President Trump might have needed mainly to make the relations with China smooth before his planned 12 June meeting with Kim Jong Un, North Korean leader. The United States needs Beijing's help, which is wielding influence in Pyongyang city, to help the border of North Korea and prevent goods from going to the regime of Kim in contravention of international sanctions.