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TWN
Info Service on WTO and Trade Issues (May25/18) Yerevan, 14 May (D. Ravi Kanth) — China appears to have turned the tables against the United States in the high-level bilateral trade talks that concluded with a “first step” agreement on 12 May, with China’s President Xi Jinping confidently declaring on 13 May that “there are no winners in tariff wars or trade wars”, while warning that “bullying or hegemonism only leads to self-isolation.” A day after the US and China agreed to drastically cut their tariffs – from 145% to 30% on Chinese goods entering the US market, and China reducing tariffs of 125% to 10% on American goods entering China – an upbeat President Xi delivered the strongest message yet during the opening ceremony of the fourth ministerial meeting of the China-CELAC (the Community of Latin American and Caribbean States) Forum in Beijing on advancing a shared development and revitalization with CELAC countries, media reports suggested. Unlike the 2018 talks between the US and China, where the two sides reached an interim agreement involving commitments by China to buy tens of billions of dollars’ worth of US goods, largely agricultural products, this time around, the first round of talks between the world’s two largest economies appeared to be more favourable to China, as Washington had seemingly “cut off its nose to spite its face”, said people familiar with the development. After US President Donald Trump embarked on one of the US’ most aggressive tariff wars during the past 90 days, threatening that his actions will severely affect the Chinese economy, he and his Treasury Secretary Scott Bessent had to finally back down, said people who asked not to be quoted. President Trump, however, defended his decision to steeply cut the tariffs that he had imposed on China, insisting that China will remove several non-tariff barriers that it had imposed against the US following Washington’s seemingly reckless tariff escalation moves. China’s stoppage of supplies of critical raw materials and purchases of farm products, as well as Boeing aircraft appear to have caused a seismic shock to the American companies. However, President Trump seemingly put on a brave face on his alleged trade debacle with China, suggesting that “I think they want it very badly. I think they want the deal very badly.” Yet, in the public perception and assessments provided by several trade analysts and experts, it is China that appears to have emerged as the big winner. US Senate Democratic Leader Chuck Schumer blamed President Trump, saying that he had “caved ” by reducing US tariffs without getting any commitments in return. “Sadly, it looks like China has once again gotten the better of Donald Trump. They have had hardly to give up a thing. It’s another example of Donald Trump chaos. Trump has one policy for his tariffs one day, a different policy the next day. One day, he’s pretending to be a tough guy with China. The next day, he’s caving to China and getting little – if anything – in return,” said Schumer. “The Geneva agreement represents an almost complete US retreat that vindicates [Chinese President] Xi’s decision to forcefully retaliate,” said Scott Kennedy, a China expert at the Washington-based Center for Strategic and International Studies, according to a news report in the New York Times on 13 May. However, it is difficult to predict how the US-China talks will proceed from the “first step” in Geneva on 12 May. Though the two sides claimed that they will not pursue nor engage in decoupling policies, China seems to be moving away by signing new contracts with several South American farm producers like Argentina and Brazil. According to a news report, titled “Who blinked first? How the US and China broke their trade deadlock”, in the Financial Times on 13 May, it is being suggested that “the US might have overplayed its hand by raising the tariff too quickly and too high.” “The US blinked first,” said Alicia Garcia-Herrero, an economist at a French bank, according to the FT report. FIVE PROGRAMS Against this backdrop, President Xi’s announcement on 13 May of a robust plan to advance shared development and revitalization with CELAC countries assumes significance. The two sides, for example, agreed to safeguard the authority of the United Nations, support multilateralism and free trade, and oppose unilateralism, protectionism, power politics and bullying to safeguard the common interests of the Global South, according to a Xinhua commentary on 13 May. President Xi announced “five programs, ranging from solidarity, development and civilization to peace and people-to-people connectivity.” According to the Xinhua commentary, on the Solidarity Program, President Xi said that “China is willing to strengthen solidarity with LAC countries and continue to support each other on issues concerning their core interests and major concerns, to firmly safeguard the international system with the UN at its core and the international order underpinned by international law, and to speak with one voice in international and regional affairs.” As part of this program, China is going to invite 300 members from political parties of CELAC member states every year to visit China to facilitate exchanges on national governance best practices, President Xi said. On the Development Program, the Chinese President suggested that Beijing “is willing to work with LAC countries to implement the Global Development Initiative, resolutely uphold the multilateral trading system, ensure stable, unimpeded global industrial and supply chains, and promote an international environment of openness and cooperation.” According to the Xinhua commentary, China has also committed to “import more quality products from LAC countries and encourage Chinese enterprises to expand their investment in the region.” On the Civilization Program, President Xi called for joint implementation of the Global Civilization Initiative. On the Peace Program, he called for joint implementation of the Global Security Initiative in which both sides could “cooperate more closely in disaster governance, cybersecurity, counterterrorism, anti-corruption, narcotics control and combating transnational organized crime so as to safeguard security and stability in the region.” According to the Xinhua commentary, on the People-to-People Connectivity Program, President Xi said that in the next three years, China will provide CELAC member states with 3,500 government scholarships, 10,000 training opportunities in China, 500 International Chinese Language Teachers Scholarships, 300 training opportunities for poverty reduction professionals, and 1,000 funded placements through the Chinese Bridge program, initiate 300 “small and beautiful” livelihood projects, and support CELAC member states in developing Chinese language education. +
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