The word from China’s state media is that the country is making three demands of the US in order to end the trade war.…
The word from China’s state media is that the country is making three demands of the US in order to end the trade war.
Multiple outlets carried this message, including The People’s Daily, Xinhua, and The Global Times. Both the first point, the removal of all tariffs, and the third point, the preservation of Chinese sovereignty, are inextricably tied as part of the country’s negotiations with the Trump administration.
US negotiators are demanding that China pass laws that would give foreign companies legal recourse in China if they had their intellectual property stolen, or if they were forced to transfer technology, for example. To China, passing such laws at the behest of a foreign power is a violation of its sovereignty. To the Trump administration, it’s part of the trade deal’s enforcement, and it won’t remove the tariffs until it sees those mechanisms in place.
So there’s that.
All that aside, though, on the second point, China’s demand is legitimate. The US is asking China to buy more goods than the US can realistically produce, without messing global supply chains, in some cases.
The Trump administration is asking China to buy so much US product that it could change the very nature of China’s economy, transforming it from a net creditor to a net debtor. The goods
Back in March Citigroup analysts Dana Peterson and Catherine Mann wrote that there actually isn’t much the US can sell China without disrupting trade with its partners or changing US production.
Citing data from the International Trade Centre, Peterson and Mann figured the US could send about $19 billion more of its soybeans and select meats to China — but that’s about it.
“The US likely can increase supplies of soy products to China in the short run, as well as select meats.
