Background on the Trade Tensions
The trade tensions between China and the United States escalated after President Donald Trump announced a hike in tariffs, particularly harsh for China. The increase amounted to an additional 145% on many products due to practices Washington deems unfair. In response, China imposed additional tariffs of 125% on US products.
Trump defends these tariff measures as a response to unfair trade practices and aims to rebuild the US industry. However, these announcements have caused unease in financial markets and fueled fears of a global recession.
China’s Official Denial
On Thursday, China firmly denied the existence of ongoing trade negotiations with the United States following President Trump’s suggestion that there is open dialogue to resolve the dispute between the world’s two largest economies.
He Yadong, a spokesperson from China’s Ministry of Commerce, stated during his weekly press briefing that “currently, there are no economic or trade negotiations between China and the United States.”
He Yadong further emphasized, “Any assertion about the progress of economic and trade negotiations between China and the United States lacks factual foundation and basis.”
China urged the United States to correct its erroneous practices and demonstrate the necessary sincerity for dialogue, returning to an equal track of consultation.
“False” Claims of Negotiations
Trump claimed on Wednesday that the US seeks a “fair deal with China.” When asked if negotiations with China had begun, the Republican magnate responded, “it’s all active.”
China’s Ministry of Foreign Affairs also responded on Thursday, calling the reports of ongoing negotiations “false.”
“As far as I know, China and the United States have not held any consultation or negotiation on tariff issues, nor have they reached any agreement,” stated Guo Jiakun, a spokesperson for China’s foreign ministry during his daily press conference.
This denial aligns with statements made by US Treasury Secretary Scott Bessen on Wednesday, who said that conversations have not yet started.
Impact on Global Growth Projections
The International Monetary Fund (IMF) recently downgraded its global growth projections due to the rapid escalation of trade tensions and high political uncertainty levels.
The IMF also significantly reduced its growth projections for China to 4%, falling short of Beijing’s target of around 5%.
China’s exports reached a historical high last year. However, analysts estimate that the impact of Trump’s new tariff announcements on global trade might compel the Chinese government to rely on other sources of economic activity to meet its growth objective.
Key Questions and Answers
- Q: What sparked the current trade tensions between China and the US? A: The dispute began when President Trump announced a tariff hike, particularly harsh for China, due to perceived unfair trade practices.
- Q: How has China responded to these tariffs? A: China retaliated with additional tariffs of 125% on US products.
- Q: What is the current status of trade negotiations between China and the US? A: Both China and the United States have denied ongoing negotiations, with China urging the US to correct its erroneous practices and return to an equal consultation track.
- Q: How have these trade tensions affected global growth projections? A: The International Monetary Fund downgraded global growth projections due to the rapid escalation of trade tensions and high political uncertainty, significantly reducing China’s growth projection to 4%.
