Trump prolongs commercial truce with China

Trump prolongs commercial truce with China

The tariffs imposed by the United States on the products of the Asian giant will not increase on March 1 and the country's stock exchanges receive the news with exaltation

   Negotiators trying to defuse the trade war between the United States and China say a peace treaty is near . And shows that the talks are on track is that this Monday Donald Trump decided to extend the truce agreed in December. In this way, the next day 1, the tariffs on Chinese products will remain unchanged and will not increase from 10% to 25%, as announced.

"I am pleased to announce that the United States has made substantial progress in trade negotiations with China, including on important structural issues such as intellectual property protection, technology transfer, agriculture, services, currency, and many other issues." , Trump announced in a message posted on Twitter. The US president also advanced an upcoming summit with his Chinese counterpart, Xi Jinping, to formalize the definitive deal in Mar-a-Lago. "A great weekend for the United States and China!" He said exultantly.

  Although the concrete concessions that both sides are willing to make have not yet been revealed, different analysts and sources related to the talks agree that China is willing to increase imports of American products considerably to reduce the endemic trade surplus that weighs on relationship between the two main world powers. It has also been leaked that Beijing could offer the opening of several sectors vetoed to foreign companies, and that both Visa and MasterCard have an interest in accessing the Chinese market of electronic payments.

The United States also wants China to commit itself to launching the economic reforms that its leaders often promise but never implement, something that is also criticized in the rest of the world. Trump demands a detailed roadmap for these reforms, so that foreign companies in China have the same access to the local market enjoyed by Chinese companies that go outside their borders. However, it seems that this point is one of the main stumbling blocks in the negotiations.

Euphoria in the bags

In spite of everything, the announcement of this Monday has been greeted with satisfaction in the Chinese government and with euphoria in the country's stock exchanges. After a 2018 to forget, yesterday the Shanghai stock market was dyed red (the color that in China marks the gains) and marked with a 5.6% its biggest rise in the last three years and made operations by value of one trillion yuan, also the highest volume since 2015. For its part, the Chinese currency appreciated against the dollar to the maximum of the last seven months, and optimism was spread to the rest of the Asian parks, which closed in positive .

As expected, the Chinese press was relieved by the possibility that an agreement will soon put an end to a trade dispute that threatens to erode the Chinese economy at a time of slowdown. "The situation shows the world that China and the United States are capable of resolving their disputes and laying the groundwork for reaching a final agreement," the People's Daily wrote. "But it is also evident that we still have to avoid some pitfalls in the most critical phase of the negotiations," the official Xinhua news agency added in a more cautious note.

In any case, all agree in emphasizing that it is already urgent to settle the dispute. The problem is to do it in a way that both parties can be victorious against their citizens. Because Trump needs a victory in the most important front of his international economic policy, to show that he was right when he said that China must be pressured to create jobs and wealth in the United States, and Beijing can not show weakness at a time when Confidence in the future of the country is in a clear decline.