Analysts say U.S. skepticism toward communist China stems from Beijing’s history of promising reforms but failing to deliver on them.
The agreement reached by the United States and China has effectively paused the trade fight between the world’s two largest economies, but analysts say it does little to resolve their underlying differences.
Following a two-day negotiation marathon in Geneva, the United States and China released a joint statement on May 12, rolling back the massive tariffs they’ve imposed on each other recently.
Washington will lower tariffs on Chinese imports to 30 percent from 145 percent, and Beijing will reduce tariffs to 10 percent from 125 percent. This agreement is temporary, lasting 90 days, and provides time for trade officials from both countries to negotiate further.
The pause will take
effect on May 14. According to the joint statement, a mechanism will be established to continue discussions about economic and trade issues between the United States and China. The American side will be led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, while the Chinese team will be headed by He Lifeng, China’s economic czar.
U.S. stocks, the dollar, and oil prices all
surged on May 12 after the announcement of the 90-day truce.
Analysts offered a more tempered response, suggesting that tough negotiations lie ahead.
“The negotiation will enter the deep water,” Edward Huang, a Taiwan-based commentator who tracks China’s economy, told the Chinese edition of The Epoch Times on May 12.
China would expect the United States to eliminate all reciprocal tariffs, but for the United States, such a tariff cut is likely to require a substantial plan from Beijing, which may include opening up its market, buying more American goods, or making other commitments, Huang said.
The 30 percent tariff that the Trump administration is now imposing on Chinese goods includes a 20 percent levy previously imposed to pressure Beijing into reducing the flow of fentanyl into the United States. Another 10 percent levy is the
baseline rate that the White House imposed on its trade partners in early April.
China’s state media also suggested that challenges lie ahead in negotiating a comprehensive trade deal.
State-run Xinhua said in a commentary published shortly after the tariff pause was announced that problems between the two countries exists and cautioned for “realistic expectations.”
Moreover, some China observers pointed to the skepticism toward communist China in the United States due to Beijing’s history of promising change but failing to deliver.
“The U.S.–China talks have reached a period of stalemate, as the United States no longer trusts China’s promises,” Wang Guo-chen, an expert at the Chung-Hua Institution for Economic Research, a Taipei-based think tank, told The Epoch Times.
He pointed to the Chinese regime’s lack of progress in carrying out its commitments outlined in the 2020 trade deal signed with the first Trump administration. From protecting American intellectual property rights to increasing
purchases of U.S. products, “China has not fulfilled any of its promises,” Wang said, while U.S.–China trade negotiation continued in Geneva on May 11.
The deal, known as the Phase One
agreement, included
commitments by Beijing to stop forced technology transfer and implement structural reforms related to trade secrets, patents, and pharmaceutical intellectual property, among others.
It followed a 2018
investigation by the U.S. Trade Representative (USTR), which found that Beijing was pressuring foreign companies into partnering with domestic companies or using other unfair methods to obtain their cutting-edge
technology and know-how in exchange for access to the Chinese market. The United States has since imposed extra tariffs on billions of imports from China.
The USTR stated in its latest annual
assessment released in April that China has fallen short on a number of commitments it had made to strengthen the protection of intellectual property under the Phase One trade deal.
Luo Ya contributed to this report.
