• Home
  • About us
  • Contact Us
  • Date/Time
  • Login
  • Subscribe

logo

  • Home
  • Politics
  • Economics & Finance
  • World
  • Arts & Books
  • Life
  • Science
  • Philosophy
  • Subscribe
  • Events
Home
  • Home
  • Blogs
  • Politics
  • Economics & Finance
  • World
  • Arts & Books
  • Life
  • Science
  • Philosophy
  • Subscribe
  • Events
  • Home

George Magnus

Insights into the global economy

We have just days to avoid a painful new chapter in the US-China trade war

Hopes of reconciliation hang in the balance as Trump hardens his stance

by George Magnus / May 7, 2019 / Leave a comment
  • Facebook
  • Twitter
  • Linkedin
  • Email

Photo: Cheriss May/SIPA USA/PA Images

It may have been coincidence, but then again perhaps not. President Trump tweeted out of the blue his impatience with the stalling trade talks with China, and threatened to resume the trade war this coming Friday, putting an end to the momentary “ceasefire.”He chose to do so on the weekend that China was marking the centenary of the May the Fourth Movement.

This anniversary, carefully orchestrated by the Communist Party, and specifically excluding open and public displays, remembers the protest movement that railed against China’s treatment at the hands of foreign powers at the Versailles peace conference and from which the Communist Party emerged two years later. For the US to time its threats to China as Trump has done will not sit well with Beijing’s policymakers.

The current talks to ease trade tensions were agreed at the G20 Summit in Buenos Aires late last year, and were supposed to have been concluded after 90 days on 1st March, but they were extended as it appeared that progress was being made. The US agreed to shelve the proposal to raise punitive tariffs on $200bn of imports from China from 10 to 25 per cent, and to desist from recommending such tariffs on the half of imports not yet subjected to them. With that, and the longer the talks continued, the more the leverage shifted to Beijing.

For most of the last five months or so, there was never really much doubt about the low-hanging fruit in these talks. Namely that China would agree to step up purchases of US agricultural goods, energy and aircraft, for example, and confirm other existing broad agreements about opening up some financial services to US firms, and possibly lifting ownership caps in some firms or sectors where there was little challenge to Chinese firms. It’s in more contentious areas that meaningful agreement was always going to prove hard or impossible, and it seems like this is where we now are.

As a result, Trump has brought full-on trade tariffs back into play, and imminently.

Chinese markets certainly didn’t like the turn of events. The Shanghai Composite stock market index fell by over 5.5 per cent, and the Yuan, which normally oscillates by minuscule amounts day to day, fell by over 1 per cent. All of this despite the announcement by the People’s Bank of China of a targeted lowering in bank…

YOU’VE HIT THE LIMIT

You have now reached your limit of 3 free articles in the last 30 days.
But don’t worry! You can get another 7 articles absolutely free, simply by entering your email address in the box below.

When you register we’ll also send you a free e-book—Writing with punch—which includes some of the finest writing from our archive of 22 years. And we’ll also send you a weekly newsletter with the best new ideas in politics and philosophy of culture, which you can of course unsubscribe from at any time







Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.

Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.

16897018745df4a6a1b5fab2.97692859

Go to comments

Related articles

The US economy remains healthy—for how long?
Megan Greene / August 8, 2019
Growth is still above potential, but trade wars and flagging business investment could...
China’s economic growth has halved—and it is set to halve again
George Magnus / July 22, 2019
The immediate problem is the trade war but there are structural issues at home causing...
Share with friends
  • Facebook
  • Twitter
  • Linkedin
  • Email

Comments

No comments yet

Prospect's free newsletter

The big ideas that are shaping our world—straight to your inbox. PLUS a free e-book and 7 articles of your choosing on the Prospect website.

Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information. Click here to learn more about these purposes and how we use your data. You will be able to opt-out of further contact on the next page and in all our communications.

This Month's Magazine

Perspiciatis unde omnis iste natus.

A pint with Mr Wetherspoon, the wisdom of Clive James, inside the new arms race. Plus: A short story by Kamila Shamsie, and the new ideas for 2020

Subscribe

Most Popular

  • Read
  • Commented

Six reasons why the Left need not despair

Ivan Rogers on "nonsense" predictions and why Johnson will not pivot to a softer Brexit

What was the general election turnout? (And four other statistics to know)

How did the Conservatives win?

The sinister threat to human rights buried in the Conservative manifesto

Boris Johnson unbound: A British tragedy?

3 Comments

Ivan Rogers on Brexit: the worst is yet to come

3 Comments

John le Carré's post-Cold War vision is shot through with a sense of longing

2 Comments

How dare those signed up to hard Brexit lecture Labour on the economy?

2 Comments

Could this psychological theory explain why we’ll never let Brexit go?

1 Comments

About this author

George Magnus
George Magnus is a well known economist and former Chief Economist at UBS. His forthcoming book is "Red Flags: Why Xi's China Is in Jeopardy" (Yale University Press)
  • Follow George on:
  • Twitter
More by this author

More by George Magnus

The new north American trade deal contains a lesson for Brexit Britain
October 8, 2018
Of course it was right to rescue the banks
October 2, 2018
Ten years since the Lehman collapse, remember how it all unravelled?
September 10, 2018

Next Prospect events

  • Details

    Prospect Book Club - David Lammy

    London, 2020-03-19

  • Details

    Prospect Book Club - Jack Shenker

    2020-02-17

  • Details

    Prospect Book Club - Amelia Gentleman

    2020-01-27

See more events

Sponsored features

  • Delivering the UK's invisible infrastructure project

  • Future of Aid: the full report

  • A forest fund for the future

  • A new humanitarianism for the modern age

  • The future of sustainable economic development

PrimeTime

The magazine is owned and supported by the Resolution Group, as part of its not-for-profit, public interest activities.

Follow us
  • Facebook
  • Twitter
  • Google+
  • RSS

Editorial

Editor: Tom Clark
Deputy Editor: Steve Bloomfield
Managing Editor (Arts & Books): Sameer Rahim
Head of Digital: Stephanie Boland
Digital Assistant: Rebecca Liu
Production Editor & Designer: Chris Tilbury
Commissioning Editor: Alex Dean
Creative Director: Mike Turner
US Writer-at-Large: Sam Tanenhaus

Commercial

Commercial Director: Alex Stevenson
Head of Marketing: Paul Mortimer
Marketing and Circulation Executive: Susan Acan
Head of Events: Victoria Jackson
Events Project Manager: Nadine Prospere
Head of Advertising Sales: Adam Kinlan 020 3372 2934
Senior Account Manager: Patrick Lappin 020 3372 2931
Head of Finance and Resources: David de Lange

  • Home
  • Advertising
  • Contact Us
  • Privacy Policy
  • Terms and Conditions
  • Acceptable Use Policy
© Prospect Publishing Limited
×
Login
Login with your subscriber account:
You need a valid subscription to login.
I am
Remember Me


Forgotten password?

Or enter with social networking:
Login to post comments using social media accounts.
  • With Twitter
  • Connect
  • With Google +
×
Register Now

Register today and access any 7 articles on the Prospect’s website for FREE in the next 30 days..
PLUS find out about the big ideas that will shape our world—with Prospect’s FREE newsletter sent to your inbox. We'll even send you our e-book—Writing with punch—with some of the finest writing from the Prospect archive, at no extra cost!

Not Now, Thanks

Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.

Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.

×
You’ve got full access!

It looks like you are a Prospect subscriber.

Prospect subscribers have full access to all the great content on our website, including our entire archive.

If you do not know your login details, simply close this pop-up and click 'Login' on the black bar at the top of the screen, then click 'Forgotten password?', enter your email address and press 'Submit'. Your password will then be emailed to you.

Thank you for your support of Prospect and we hope that you enjoy everything the site has to offer.

This site uses cookies to improve the user experience. By using this site, you agree that we can set and use these cookies. For more details on the cookies we use and how to manage them, see our Privacy and Cookie Policy.