China and the US are at a stalemate on trade agreements right now between the two countries because of President Trumps tariffs on China’s goods imported into the US.
For about a week now the US import tariffs have been at 25 percent on imports of Chinese goods up from 10 percent and former CEO Lloyd Blankfeinof Goldman Sachs commented on Twitter today that it was a good negotiating tool to pressure China into a trade agreement with the US.
Blankfeintweeted, “Tariffs might be an effective negotiating tool. Saying it hurts us misses the point. China relies more on trade and loses more. As in a labor strike where mngmnt & workers both get hurt, the process may demonstrate relative strength & resolve & where compromise needs to happen.”
On the other hand though corporate American companies, local main street businesses, analysts and economists are warning the Trump administration that the cost of the tariffs on imported Chinese goods will be passed on to US consumers increasing prices on purchases for them.
Blankfein, however further commented that if it comes to that, American consumers could put pressure on China by purchasing domestic ‘American made’ products or buying from non-Chinese companies or even paying the higher price on Chinese goods in a way to help ‘level the playing field.’
Currently China’s exports of their goods to the US are five times greater than US exports to China and this bears heavily on China’s economic success. President Trump is trying to make trade between the two countries fair and so is using the increase in tariff charges on imported goods from China to exert pressure on China’s President Xi Jinping to make significant concessions to their continuing trade dialogues which currently are at a standstill.
China said last week that it would retaliate by increasing duties on $60 billion in US shipments. China also has other tools to retaliate particularly by making it more difficult for American companies to do their business in China such as increasing duties on materials imported that are used by American companies to produce their products in China. Another tool which China could implement is that of increasing scrutiny in their inspections of American companies’ operations.
Experts are saying that the increase in tariff on imported Chinese goods won’t make that much of a difference to US consumers. They won’t be seeing that great of an increase in prices.
China’s and the US’s trade negotiations are at a stalemate for now but hopes for a deal are expected in a few weeks as Trump and Xi are scheduled to meet in Japan at the G20 summit in June.