Chinese Side: Important Consensus Reached, Substantial Progress Made in Trade Talks

High-level officials from China and the United States achieved a major breakthrough in the two-day closed-door talks held in Geneva. Rarely did both sides send out a consistent voice on the long-standing tense issue of tariff disputes: the negotiations have made "significant progress".

According to Xinhua News Agency's report on May 12, He Lifeng, the lead negotiator for China in the economic and trade talks and Vice Premier of the State Council, stated at a press conference in Geneva on the evening of May 11 that this high-level economic and trade talk between China and the United States was candid, in-depth, and constructive, reaching important consensus and making substantial progress. Both sides agreed to establish a Sino-US trade consultation mechanism. Li Chenggang, Deputy Minister of China's Ministry of Commerce who attended the meeting, added that this mechanism will "carry out regular or irregular exchanges on relevant trade issues".

Meanwhile, the White House announced that an agreement had been reached with China in Geneva. US Treasury Secretary Beasant said: "I am pleased to report that significant progress has been made in this very important trade negotiation between the US and China. First, I would like to thank the Swiss hosts... The specific details will be released tomorrow, but I can tell you that this negotiation has been highly effective." US Trade Representative Jamison Greer, who participated in the talks, said: "As the Treasury Secretary mentioned, these two days of negotiations have been highly constructive. Importantly, we were able to reach an agreement quickly, which shows that perhaps our differences are not as large as imagined." He said that the result is "an agreement we have reached with our Chinese partners", which will help reduce the US global commodity trade deficit of $1.2 trillion.

Reuters reported that US Treasury Secretary Beasant stated to the media in Geneva on Sunday (May 11) that the details of the agreement would be released on Monday and that President Trump had been fully informed about the "productive dialogue" results.

The talks took place at a lakeside villa in the suburbs of Geneva. The Swiss Ambassador's residence hosted the talks. Reuters described the scene during the two-day negotiations: "Black Mercedes-Benz cars shuttled between the heavily guarded villas under the bright sun, creating a tense atmosphere."

The neutral country Switzerland was chosen as the venue for the talks after recent visits by Swiss political figures to both China and the US.

A Few Comments: No matter what, the normalization of normal trade relations between China and the US still faces huge uncertainties. Even if tariffs are reduced, higher tax rates may still significantly affect the scale of Sino-US trade. As Gary Hufbauer, an expert at the Peterson Institute for International Economics, pointed out, the consultations themselves are "a positive signal for trade and financial markets". However, he also frankly stated that "the normalization of normal trade relations between China and the US still faces huge uncertainties." He said: "A 145% tariff is completely obstructive; even if it is reduced to 70% or 80%, the scale of trade between China and the US may be halved."

The US has long faced problems with trade deficits, and domestic political and economic factors are complex. The degree and pace of tariff adjustments may be influenced by various forces, creating uncertainties, which pose challenges to Chinese export enterprises and the restoration of Sino-US trade balance. Moreover, reaching an agreement is just the first step, and the subsequent implementation and enforcement of the agreement face many tests. There are differences between China and the US in economic and trade policies and market rules. In the specific process of implementing the trade consultation mechanism, how to ensure that both parties honor their commitments and effectively solve new emerging problems is a continuous concern and challenge. The continuity of US government policies also poses uncertainties, which may interfere with the execution of trade agreements due to changes in the domestic political ecosystem.

In general, the progress in this round of Sino-US trade negotiations is a positive signal, but achieving full normalization and healthy development of Sino-US trade relations still requires sustained efforts from both sides and proper handling of many challenges.

Original Source: https://www.toutiao.com/article/1831866894314499/

Disclaimer: This article represents the personal views of the author.