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The High Probability Of A Trade War Between China And The United States In 2019 Will Ease
Kinghood International Logistics Inc | Updated: Jan 14, 2019

In 2018, china-us economic and trade relations showed tension, and trade disputes continued to rise, exceeding the expectations of all sectors at the beginning of 2018.Not only has the United States expanded the range of goods subject to tariffs from $50 billion to $200 billion in trade, but its attitude toward China has also changed significantly in other areas.

However, the deteriorating situation improved at the G20 summit in Argentina in early December 2018, when the leaders of China and the us met to send a positive signal of tentative trade disputes.China and the United States have confirmed that they will increase the number of trade disputes and discuss the settlement of trade disputes through 90-day negotiations.

While President trump has been aggressive in his approach to trade disputes, they have not been a one-way bet for the United States.

Us financial markets have seen a marked dip since October 2018 after the us slapped tariffs on $200bn of Chinese goods.By the Dec. 21 close, the s&p, dow and nasdaq were down 16%, 15% and 20% from their highs for the year.The wild swings in us financial markets also highlighted investor panic.

In addition, the trade dispute will also drive up the level of inflation in the United States.Furniture and leather goods, both of which account for more than half of us imports, are included in Mr Trump's list of goods to be taxed on China, and imposing tariffs will undoubtedly increase pressure on domestic prices.If trump further increases taxes on all goods from China, considering that 90% of umbrellas, 80% of toys, 70% of headwear, 60% of luggage, and more than 50% of footwear and textile imports are from China, it will definitely harm the interests of American consumers.

Moreover, the rise in inflation has forced the us to tighten monetary policy and continue to raise interest rates, something Mr Trump does not want.

But for China, although the short term, the American importers and retailers have certain adjustment space, depreciation, export tax rebates up will also reduce pressure on the part of, but in the long run, because the alternative to the export market in the United States is not easy, trade dispute about investment prospects, entrepreneurs, confidence, and far-reaching impact industry chain upstream and downstream enterprises, trade dispute the longer, the greater the risk.

Therefore, shen jianguang judged that China and the United States have a certain consensus on seeking to postpone the negotiations on the trade dispute, and it is very likely to reach an agreement, and the economic and trade relations between China and the United States in 2019 May be better than that in 2018.

At present, there are more and more positive signals to create room for negotiation in china-us economic and trade consultation.

Gao feng, spokesman for the ministry of commerce, said on dec 6, 2018 that China will start with agricultural products, energy and automobiles, and immediately implement the specific issues reached by the two sides.

Chinese companies bought 1.13 million metric tons of U.S. soybeans for the first time since the U.S. and China imposed tariffs on each other in July, U.S. department of agriculture officials confirmed Wednesday.Then on December 20, according to the official website of China storage grain corporation, in order to implement the consensus reached by the heads of state of China and the United States, China storage grain corporation announced that it recently purchased some soybeans from the United States in batches.China also announced a three-month suspension of tariffs on cars and parts made in the United States from January 1, 2019.

Before that, further opening-up measures are being implemented.

In this context, how to see the direction of china-us economic and trade relations this year?

Shen jianguang believes that in the context of trump's unknown bottom line, we need to do two aspects of planning.On the one hand, we should prepare for the worst and do our own thing to boost confidence in China's economic development.Accelerate the implementation of the third plenary session of the 18th central committee of the deployment of market-oriented reform, reform measures to implement "sooner rather than later, sooner rather than later".On the other hand, we will accelerate the pace of opening-up and take an active part in multilateral negotiations.For example, we should speed up negotiations on the china-eu free trade area, strengthen RECP, and push forward FTA negotiations with China, Japan and the rok to effectively hedge external risks.

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