Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
It’s been a busy day in China-US relations, with Beijing announcing that it was temporarily slashing tariffs on American autos and news breaking of another major Chinese purchase of US soybeans – the second in a week.
China’s Ministry of Finance said it was removing additional tariffs on US auto imports for three months from 1 January. That would bring Chinese tariffs down to 15 per cent – in line with other countries, CNN reports.
A statement from the Ministry said the move was a “concrete action” aimed at helping to bring about a “mutually beneficial new Sino-US trade order.”
The announcement coincided with a statement from the US Department of Agriculture revealing that China had purchased 300,000 tonnes of soybeans from America – just days after another 1.13 million tonne sale earlier this week.
According to Politico, the purchases are a ‘sign that a trade war cease-fire between the two countries is returning commerce somewhat to normal, at least temporarily.’
The developments suggest that China is beginning to give ground in the trade war, which is starting to make its presence felt on the economy. New data released this week shows Chinese retail sales slumped to a 15 year low amid a sluggish quarter, the South China Morning Post reports.
For President Trump, who sees trade as a zero-sum game, this was welcome news. “China just announced that their economy is growing much slower than anticipated because of our Trade War with them,” he tweeted. “They have just suspended U.S. Tariff Hikes. U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!”
However, a struggling Chinese economy is no good thing for the global economy. Speaking at Asia House’s trade summit in Singapore last month, Robert Koopman, Chief Economist at the WTO, shared his fear that the trade war could spook Chinese consumers, which would in turn check global growth.
That seems to be happening, with Chinese retail growth dropping sharply from 8.6 per cent to 8.1 per cent.
The Dow Jones fell when US trading opened on Friday in light of the data, MarketWatch reports.
