A fruitless conflict that threatens the global economy should not be left to continue indefinitely. In order to calm the confrontation, both the United States and China should make further efforts to reach a compromise.
U.S. President Donald Trump declared that he would extend a deadline for negotiating a trade deal with China. He will delay for the time being an increase in U.S. punitive tariffs on Chinese goods, slated to be implemented on March 2. Trump also suggested he would hold a summit with Chinese President Xi Jinping as early as in March, to conclude a final agreement.
One reason for this is that both countries had reached a partial accord during ministerial-level talks on such issues as an increase in China's imports of U.S. goods and the stability of the yuan's exchange rates.
The bilateral trade talks, which had been riddled with hostility, have at last made progress. It is probably because both countries have heightened their sense of crisis over the damage trade friction would inflict on their own economies.
China's economy grew at its slowest pace in 28 years last year. In the United States, consumption and the performance of U.S. companies have deteriorated.
The U.S.-China trade friction will also stagnate the trade and production of countries around the world. By looking squarely at the possible peril that a clash between major economic powers would bring about, both countries are urged to expedite the final round of negotiations.
It is hard to be optimistic about the outcome of the talks because the United States and China have been waging a battle over supremacy not only in trade but also in advanced technologies and security.
The United States is pressing China to review such practices as giving subsidies to state-owned enterprises, arguing that they distort the environment for fair competition.
For China, such measures constitute the core of its economic strategy of promoting its industries under the state's leadership. The strengthening of high-tech industries will also lead to the development of military technologies. China is not likely to readily go along with such U.S. demands.
However, mitigating trade friction is indispensable for the revitalization of the Chinese economy. If Beijing continues its self-serving policies, the number of foreign companies that refrain from investing in China will increase. The country must strive to correct such policies on its own initiative.
There is also a problem with Trump, who is insisting on a reduction of the U.S. trade deficit. The balance of trade is influenced by various factors, such as global economic trends and currency exchange rates. It cannot be controlled by its accord with China alone.
The two countries may reach an agreement at the upcoming summit. But even so, there is a possibility of trade friction rekindling unless the trade balance between the two countries improves. Will this end up as a fragile agreement?
Worrisome is that China, in its eagerness to avert U.S. sanctions, may accept unreasonable demands from the United States. China is set to promise to increase its purchases of U.S. products, including soybeans, by presenting specific quantities.
If such quantitative controls — involving fixed amounts of imports from a specific country in advance — go unchallenged, free trade will be impeded.
Japan will enter into negotiations on a trade agreement on goods with the United States as early as this spring.
Won't the Trump administration force Japan to also adopt numerical targets, in light of what it has achieved through its talks with China? Japan must exercise sufficient caution.
-- Japan News