Expert on U.S. China trade deal: 'I’m not sure exactly how they get to the end of this'
As the U.S. and China conclude yet another round of trade talks, negotiators have made progress on key issues — while sticky issues like how exactly to roll back punitive tariffs remain.
“I’m not sure exactly how they get to the end of this particular negotiation,” American Action Forum President Douglas Holtz-Eakin told Yahoo Finance’s On The Move (video above). “They’ve done the easy stuff which is agree to close the bilateral deficit… But the hard thing is the enforcement and dropping the tariffs.”
A recent brief trip to Beijing by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, aimed at improving relations, was said to end productively. As more hope builds related to ending the painful trade war, Holtz-Eakin believes the “markets are going to reward simply stopping the war.”
Investors, business leaders, and the Trump administration are hoping that U.S. and Chinese officials can finish building a comprehensive deal in the next few weeks.
Holtz-Eakin noted that in any deal, “the global trading community would want the tariffs to go away.” (The American Action Forum is a Washington, D.C.-based nonprofit issue advocacy group based that promotes center-right public policy.)
Trade uncertainty has caused volatility in the market on both ends. And while there is eagerness to move forward in a deal, many industries would prefer the U.S. to negotiate further in order to truly address the current problems at stake.
“The real question is how can [a resolution] happen? I think the enforcement and the tariffs are tightly linked in the President’s mind,” Holtz-Eakin said. “He thinks of keeping the tariffs in place as the mechanism that forces the Chinese to comply with whatever agreement they’ve reached.”
Remaining issues include U.S. concerns over intellectual property theft and forced technology transfers, tariffs between both counties, supply chain disruption, enforcement of any deal, and how markets would weigh any announced resolution.
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