During a casual video conference, US Treasury Secretary Janet Yellen and Chinese Vice Premier Liu spoke about the severe economic challenges, trade barriers, and supply chains. When US President Joe Biden agreed to consider the prospect of lowering taxes on Chinese imports in order to manage the skyrocketing prices, the two officials met.
Janet Yellen, the secretary of the Treasury of the United States, expresses concerns over China’s “unfair, non-market” economic practises and Russia’s war against Ukraine. The two largest economies on the globe are also dealing with tightened supply chains and rising energy costs. The two met as part of the effort to conclude decisions on soaring prices, which are rising at the fastest rate in more than 40 years. The meeting was held after US national security adviser Jake Sullivan, on the sidelines of the G7 summit in Germany, spoke about Biden’s and Xi Jinping’s being expected to meet soon in the coming weeks. The Treasury Department described the call as “candid and substantial” and part of the attempt to “keep open channels of communication,” during which the two parties also discussed the global economic picture amid rising commodity prices and difficulties with food security.
China’s official Xinhua news agency said that “the two sides believe that it is of great significance to boost macro-policy communication and coordination between China and the United States as the world economy is experiencing serious challenges.” Cooperation between the two can ease many global crises around the world. While Chinese officials described the talks as constructive for both nations. The issues regarding the Russian war on Ukraine were also raised by Yellen during a call and the way it has impacted the world over the past four months and the unfair and non-market Chinese economic practices. China has refused to condemn Russia’s actions in Ukraine, prompting the West to accuse Beijing of providing diplomatic support to Moscow.
As China raised concerns over US tariffs and sanctions on Chinese firms, the two countries are said to have agreed to have a dialogue on this issue. The ministry issued a statement in which it said, “As the global economy faces serious challenges, there is a tremendous relevance to increasing the communication and coordination of the macro policies between China and the United States.” The issue of easing and lifting Chinese tariffs and sanctions remains unresolved in the United States; some of the trade duties imposed on China by Donald Trump, Biden’s predecessor, were intended to punish China for unfair trade practices. Although some of Trump’s decisions and duties are going to expire on July 6th and renewal of the same is yet in talks.
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Asserting that certain tariffs “make no strategic sense” and are “paid by Americans, not by the Chinese,” Yellen has publicly urged Biden to lower them. The US administration’s stated position on China has been and will remain that it engages in unfair trade. Yellen’s repetition of the assertion is therefore not unexpected. What can be done about it is, of course, the key question. Although having a dialogue is a good first step, more than just casual interactions with government officials will need to come next. Some economists say that the contentious relations between the US and China and their rising disputes on different issues will not ease with the constant dialogue and reduction in tariffs. The dialogue may be beneficial in the short term, but it will not resolve their strategic trade competition. These are structural problems regarding the treatment of US companies in comparison to their Chinese competitors, having implications for global competition as well as market access in China.
The Unending trade war
A so-called cold war driven by divergent ideologies has developed out of what started as a trade conflict against China’s unfair economic practices. The multiple battles of the trade war between the US and China started way back in the in-group’s administration in 2018. Following the levies, China’s access to high-tech American products was restricted, foreign investments faced security worries, and accusations of unfair Chinese business practices were made. The sanctions on imported goods and trade tariffs never served the purpose easing of tensions between them; rather, they were both at a loss. Trade and investment, as well as possibly the global economy, might be severely hampered by subsequent retaliation by trading partners and the possibility of further escalation. President Joe Biden must now decide whether to maintain US tariffs and other trade restrictions or alter policy in light of the COVID-19 outbreak and changing circumstances.