Abstract: This research paper examines the U.S. -China financial relationship which has reached a important juncture. During the last year, the U.S imposed tariffs on $250 billion worth on Chinese imports and China has retaliated, raising tariffs on U.S. exports. At the G-20 leaders’ summit in November 2018, Presidents Trump and Xi agreed to remedy the trade dispute within 90 days—through March 1, 2019, even though this cut-off date has been lately extended.
The U.S. worries that underpin these bilateral tensions stem from unique practices endemic to China’s financial model that systematically tilt the field to favor of Chinese corporations regionally and globally. Development on specific trade issues would require China to conform with its world trade organization (WTO) commitments and to make sure reforms will touch on areas of state control over the economy.
In addition, new trade rules are needed to address China’s economic practices not covered by its WTO commitments, including in areas such as state-owned enterprises (SOEs), certain subsidies, and digital trade. These issues also come at a time of increasing U.S. concern over the national security risks China presents, particularly with respect to technology access.
Despite the challenges the U.S. has had at the WTO, the WTO should be central to resolving U.S.-China trade tensions. From this perspective, we outline a multipronged strategy, including bilateral, multilateral, and unilateral actions, as well as working with allies, that together would constitute positive next steps for this critical economic relationship. In taking this multifaceted approach, the U.S. also needs to stay true to its values and not accept short-term gains or “fig leaf” deals. In particular, creating a managed trade relationship with China would not be a constructive outcome. The resulting deal should address the real issues at hand in a free market manner and strengthen the multilateral global trading system and rule of law that the U.S. has championed in the post-World War II era.
All of these matters underscore the complexity of U.S.-China bilateral negotiations as well as the stakes at play. Resolving U.S.-China differences in a meaningful way will take time.
Keywords: U.S. -China financial, world trade organization (WTO), Economic Relationship.
Title: THE UNITED STATES OF AMERICA AND CHINA’S TRADE AND ECONOMIC RELATIONSHIP: A RISK MANAGEMENT SOLUTION BASED APPROACH
Author: MAYOWA OMOSA
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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