U.S. officials hinted that talks with China would take place in early August, and if the talks go well, Trump might make it to the September 3 military parade?
Recently, U.S. Commerce Secretary Rutenberg revealed that an American delegation will hold trade talks with China in early August. The lineup is quite impressive - the Secretary himself, Treasury Secretary Bensont, and Trade Representative Grille are all attending. The day before, Treasury Secretary Bensont also hinted that "in the coming weeks" they would meet with China. So what might this round of talks be about? Let's guess.
The U.S. has resumed exports of ethane, EDA software, and C919 aircraft engines to China, while China "returned the favor" by accelerating the approval of U.S. rare earth magnet permits. Anyone can see that this is implementing the consensus from the June U.S.-China London economic and trade talks, giving each other some sweeteners first to lay a foundation for the tough battle in August.
The core pressure point of this negotiation lies in the tariff deadline. In April, Trump gave other countries a 90-day "tariff exemption period," which is about to expire. Starting July 9, the U.S. has already sent tariff letters to many countries, and starting August 1, tariffs ranging from 25% to 40% will be imposed unilaterally. However, the U.S. dares not directly send a letter to China - in May, the U.S. and China reached a 90-day truce agreement separately, which expires on August 12. In other words, the talks in early August are the last window period. If no agreement is reached, the tariff stick will be immediately applied, directly colliding the two largest economies on the tariff front.
Why is the U.S. now showing a negotiation posture? The fundamental reason is that it can't bear it anymore. On the surface, resuming engine and ethane exports is a "concession," but in reality, it's doing a "cardiopulmonary resuscitation" for its own companies - China accounts for half of U.S. ethane exports, and the market profits of EDA and aviation engines also rely heavily on the Chinese supply chain. More worrying for the U.S. is that China's alternative solutions have already been put on the table: if the C919 aircraft is cut off from engine supplies, the domestically produced Changjiang-1000A is accelerating test flights; if ethane imports are restricted, Middle Eastern sources are ready to step in. After several years of Trump's tariff war, the result is that U.S. consumer goods prices have risen, farmers have lost orders, and the supply chain has become chaotic. Continuing to hold out any longer will mean a huge deficit on the election ledger.
Looking at how other countries negotiate with the U.S. shows how much weight China's leverage carries: Vietnam accepted a 20% base tariff but refused to open up agriculture; India firmly held the agricultural "red line," choosing to impose retaliatory tariffs on U.S. auto parts instead; the EU was even more stubborn, preparing a 21 billion euro countermeasure list and declaring "value-added tax and digital sovereignty will not be compromised." Even Japan, threatened with a car tax increase to 35%, did not budge on the agricultural market. These negotiation results are like a mirror, reflecting the failure of the U.S.'s "extreme pressure" strategy, and also indicating that in the U.S.-China negotiation table, China has enough confidence to refuse unequal terms. If there is indeed a breakthrough in the talks in early August, maybe Trump could attend the September 3 military parade.
Original article: https://www.toutiao.com/article/1837164413938688/
Statement: This article represents the views of the author.