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Analyst on US-China Trade War: Trump Brags About Things He Doesn't Know End Of

© REUTERS / Leah MillisU.S. President Donald Trump speaks at a campaign rally for U.S. Senator Ted Cruz (R-TX) in Houston, Texas, U.S., October 22, 2018
U.S. President Donald Trump speaks at a campaign rally for U.S. Senator Ted Cruz (R-TX) in Houston, Texas, U.S., October 22, 2018 - Sputnik International
Sputnik spoke about developments in the US-China trade dispute with Claude Barfield, a former consultant to the office of the US Trade Representative, a researcher on international trade policy (including trade policy in China and East Asia), the World Trade Organization (WTO), intellectual property, and science and technology policy.

Sputnik: A Meeting between Donald Trump and Xi Jinping is scheduled for the end of November during the G20 Summit in Buenos Aires. Which issues can be solved there?

Claude Barfield: I doubt that any specific issue will be solved there. It's more of an attempt for the two sides to signal each other. On Chinese side — that they are willing to make some concessions. On the American side — that if the concessions are enough. I think it is just a scoping meeting. When you get the heads of states in meeting like this they are not going to come out of here with a list of 10 or 25 things they've agreed to. It is mostly just to keep the negotiations going. They could do a symbolic one or two things. Trump hopes that the Chinese will at least give some indication maybe behind the scenes with Xi Jinping, that they are willing to make some concessions.

Sputnik: US plans more China tariffs if Trump-Xi meeting fails. How would it affect China's economy? Will he create more tariffs?

Claude Barfield: That will depend on the signals that he gets from Xi Jinping. It's to whether or not Chinese are serious about compromising on proposal that the administration has made. If yes they may hold off. This is just a negotiation tactic. They've introduced some of these tariffs before. This is typical of Trump to lay down a hard line proposal so that the other side would come back with some sort of compromise. I don't know if they will or will not do that between now and the end of November.

But I think if you do the whole 250 (tariffs on $250 billion worth of Chinese goods) it will hurt both economies. If you look at this on the Chinese side it is certainly true that there is a good deal of national pride and they are not going to bow to an ultimatum from the US or anybody else. On the other hand Xi Jinping has got a very delicate balancing act, the Chinese economy is slowing, investment in China has slowed down. If US goes forward with full program of trying to cut off supply chains it will certainly hurt US companies but it would certainly hurt Chinese companies. Since China has become a supply chain center in electronics and chemicals.

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So the other thing is that Chinese are in the situation where they are still paying in shorter term price for the fact that they just threw a huge amount of money at the economy when the rest of the world went into recession in 2008-2009. That's a hangover to their economy now. And so again it is one of those things you have to be careful about. And there is a long term problems: the aging Chinese population, huge pollution questions that have been going away. The Chinese are not in the strongest position. In the short term it looks as if the US are in much stronger economic position. The US economy is growing, we got the record low unemployment, we got investment, the trade is growing.

For the moment this could change next year because of the tax cuts here, because of increase defense spending. You really have a boost in US economy. There are two sides here: it's not that Chinese economy is totally weak or strong. But in comparative terms US economy is stronger than Chinese.

Sputnik: Why is President Trump so sure that Washington will win a trade dispute with China?

Claude Barfield: Trump brags about a lot of things he doesn't know the end of. This is partly a negotiating ploy. He casually lies about things without thinking. It's just classic Trump to brag about it. One can agree or disagree but he is certainly showing that he is willing to do that. He just gradually lifts up tariffs and saying that he is going to go further.

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Sputnik: Will that relations between the US and China improve? Who will win in this situation?

Claude Barfield: I think that in the near terms we'll get worse. I'm not sure that Xi Jinping is ready to concede a lot of things that US have charged in terms of China 2025 (a strategic plan of China issued by Chinese Premier Li Keqiang), in terms of closing of high tech sectors. US has already moved to stop exports of components. I can't predict how this is going to end but we are likely to have increased tension economically. This is just in a larger context: the tension of the South China sea, increasingly the tension over. It's a mixture of economic and geopolitical thing. Which I think in medium term will increase.

The views expressed in this article are those of the speaker, and do not necessarily reflect those of Sputnik.

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